Abstract

The study aims to identify factors that influence Micro, Small, and Medium Enterprises (MSMEs) in utilizing peer-to-peer lending as an alternative business financing. The object of this research is Palembang City MSME players. This type of research is descriptive quantitative using primary data obtained through a questionnaire instrument to 90 respondents. While the data analysis technique uses Structual Equation Model-Partial Least Square (SEM-PLS) with the help of SmartPLS 4.0 software. The results showed that the variables of Information Quality (IQ), Perceived Ease of Use (PEU), and Perceived Risk (PR) had a significant effect on Perceived Trust (PT). Meanwhile, the variables Perceived Risk (PR) and Perceived Trust (PT) have a significant effect on Decision (DEC). The managerial implications indicate that using peer-to-peer lending as an alternative financing can provide new benefits for MSMEs. However, users must consider several factors that will influence the decision to use peer-to-peer lending. One that must be understood is knowing valid information to make the right decision; the second is understanding the risks associated with using peer-to-peer lending, such as privacy and data security. Perceptions of convenience and trust explain that the greater the level of convenience felt by MSMEs in using peer-to-peer lending fintech, the greater the trust felt by MSMEs when using peer-to-peer lending.