Abstract

Financial technology makes it easier for people to access financial products and services. One type of financial technology that is an alternative to meet the financing needs of the community is Peer to Peer Lending (P2P Lending). P2P Lending is a platform that brings together lenders and borrowers. Funds that lenders lend to borrowers through the P2P platform may face various risks, such as the borrower being unable to repay the loan. This study aims to analyze the mechanism of P2P lending companies in verifying the ability and eligibility of borrowers based on applicable regulations and how the legal responsibility of P2P lending companies to lenders if the borrower is unable to pay the loan. The research method used in this research is juridical-normative. An important finding in this study is that P2P lending companies carry out credit scoring and risk assessments when providing loans to borrowers. However, the legal responsibility of P2P lending companies to lenders is only limited to conducting credit analysis of borrowers to reduce the risk of default. However, to protect against the risk of default by borrowers, P2P lending companies protect them with insurance or protection funds. Therefore, Financial Services Authority (FSA) needs to educate P2P Lending, borrowers, and other users regarding the process and responsibility for funds provided by lenders.

Keywords

Fintech, P2P Lending, Legal Responsibility, Lender, Borrower