Chinese-backed FinTech Lending Boom: How did Indonesia Respond?

HKUST IEMS Thought Leadership Brief No. 67


Angela Tritto, Yujia He & Victoria Amanda Junaedi

Peer-to-peer (P2P) online lending has the potential to boost innovation and financial inclusion in emerging markets, yet it can also incur investment and borrower-related risks, such as privacy breaches.

Driven by regulation control in China, Chinese investments flocked to Indonesia, causing a rapid expansion of online lending platforms.

Similar to what happened in China prior to the regulatory crackdown, the P2P lending boom in Indonesia saw a rise in unethical and illegal business practices. The government responded by creating new regulations and institutions to mitigate risks without stifling the potential for financial inclusion.

A proactive approach towards monitoring and regulating emerging high-tech industries should be sought by strengthening links with industry and civil society, and through international cooperation for policy and knowledge sharing.

About the Authors

Angela Tritto is an Adjunct Assistant Professor at the Division of Public Policy and a Postdoctoral Fellow jointly appointed by the Institute of Emerging Market Studies and by the Division of Social Science. More>>

Yujia He is an assistant professor at the Patterson School of Diplomacy and International Commerce, University of Kentucky. Previously she was a Postdoctoral Fellow at Hong Kong University of Science and Technology jointly affiliated with the Institute for Emerging Market Studies (IEMS) and the Jockey Club Institute for Advanced Study. More>>

Victoria Amanda Junaedi is an undergrad research assistant at the Institute of Emerging Market Studies, the Hong Kong University of Science and Technology, studying Economics and Finance. More>>



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Pratama A.H. (2021) Tokopedia’s P2P lending arm, 9 others get license from Indonesia’s OJK. Tech in Asia

Potkin F, Zhang S, Diela T (2018) RPT-A call to the boss: Indonesia contends with aggressive Chinese online lenders. Reuters

Sugandi, E. A. (2021). The COVID-19 Pandemic and Indonesia’s Fintech Markets. Asian Development Bank Institute.

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Wall Street Journal (2020) China Hails Victory in Crackdown on Peer-to-Peer Lending.

Yuniar RW (2019) Indonesia’s online P2P loan sharks are driving people to suicide. South China Morning Post

Yuniarni S (2019) Consumers face harassment by Fintech debt collectors due to weak data protection. Jakarta Globe

Full article: Tritto, A., He, Y. & Junaedi, V.A. Governing the gold rush into emerging markets: a case study of Indonesia’s regulatory responses to the expansion of Chinese-backed online P2P lending. Financ Innov 6, 51 (2020).


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