Analysis of the effects of Peer to Peer Lending to Rural Bank’s loan in Indonesia : complimentary or substitution?

This study was conducted to analyze the impact of the growth of Peer to Peer Lending (P2PL) on the loan growth of Rural Bank during the Covid-19 pandemic. The research was conducted using loan distribution data from these two financial institutions for the year of 2020 and 2021. Previously, another study by Kohardinata et al. (2020) related to the analysis of the impact of P2PL on Rural Bank’s loan after the signing of a memorandum of understanding between the Indonesian Fintech Association and the Indonesian Rural Banks Association using panel data regression with the loan distribution data of the year of 2018 and 2019, where in 2018 P2PL is a substitutive and in 2019 it is changed to be a complementary to the Rural Bank’s loan. The results of this study indicate that P2PL is complementary to the Rural Bank’s loan. This result is in line with the Indonesian Financial Services Authority’s plan to collaborate the business model of both Rural Bank and P2PL. Furthermore, it is hoped that Indonesian Financial Services Authority as the regulator of financial institutions in Indonesia can make a standard provision as the basis for the collaboration between these two financial institutions.