The Concept and Development of Peer-To-Peer Lending as a Method of Digitalizing Finance in Indonesia (Evaluation of Legal Protection for Borrowers and Lenders)

Abstract

In recent years, Peer-to-Peer Lending and other forms of financial technology in Indonesia have seen significant expansion. However, the existing legal problems call for a specific, all-encompassing statute to safeguard all parties participating in fintech deals. The legal issues and obstacles encountered by Peer-to-Peer Lending are explored via the lens of a normative legal approach, including philosophical and analytic analysis. The findings highlight a number of critical problems that might benefit from a robust legal framework. To begin, there must be a comprehensive Fintech Law that covers all aspects of fintech business to ensure that all stakeholders are adequately protected. For this legislation to accurately represent the hopes and requirements of all parties involved, stakeholder input throughout the writing process is crucial. To combat the issue of unlawful fintech and safeguard everyone's interests, authorities like the OJK and BI must increase their oversight. The fintech industry also needs its own alternative dispute resolution organization. Third, while crafting legislation, it's crucial to keep financial security and consumer safety in mind. There needs to be better safeguards for user data, interest regulation and collecting procedures, openness, and conflict resolution processes. Increased financial knowledge and efficient law enforcement are also critical to making the P2P lending industry safe for all participants. The growth and development of the fintech industry relies on both regulatory flexibility and market competition. The Peer-to-Peer Lending business in Indonesia has the ability to expand healthily and inclusively, benefiting the whole society and economy if these challenges are addressed via good legislative frameworks and efficient coordination between regulators and stakeholders.