5) of –0.998, indicates that the loans received by MSEs are statistically affected by the purpose of loan usage. MSEs with lending utilisation for consumptive purposes tend to obtain fintech loans that are smaller than expected. In online selection system, fintech operators recognize that such lending purposes are deemed to be riskier than that for productive purposes, such as for improvement in working capital online installment loans Massachusetts. It means that fintech providers must have the ability to innovate technology (eg. Utilising artificial intelligence (AI) to identifiy such behaviour in order to minime the risk of loan default. According to Boshkov & Drakulevski (201seven), risk management makes financial institutions, especially fintech, to necessarily have a framework to manage various financial risks, including procedures to identifying, measuring and controlling risks with AI.
6) is statistically significant. Regression coefficient of –2.315 indicates that the shorter payment period between annuities will be a consideration for lenders to provide loans for prospective MSEs. Payments on a daily or weekly basis will incur higher costs than on a monthly basis, especially if the debtor MSEs do not pay according to the agreement. This kind of debtor behavior will disrupt cash flow of fintech institutions.
Regarding the variable of completeness of credit requirement document (X7), it is statistically significant. The regression coefficient of –0.77 indicates that the ownership of basic documents without a business license document, such as an ID card, still has the opportunity to get a fintech lending in accordance with their expectations. It means that the requirements for fintech lending documents tend to be easier and more flexible than the banks. The characteristic makes it easier for MSEs to access fintech loans as stated by Budisantoso et al. (2014) that the major characteristics of suitable credit for MSEs is the utilization of uncomplicated borrowing procedures.
Hence, fintech will evaluate 1 by 1 with AI technology ahead of holding away borrowing from the bank summary to decrease the danger borrowing from the bank that cannot be came back (Widyaningsih, 2018)
Furthermore, a reason for borrowing variable (X8) is not statistically significant. However, positive coefficient indicates that the ease of fintech requirements to get a virtual lending has no effect on the amount of loan approved. It means that the convenience factor is not a determining factor for investors (lenders) to provide the lending. Fintech utilizes digital technology to identify potential debtors’ abilities, in addition to the collateral ownership factor. The characteristic of fintech is significantly different from banks which generally require collateral as a condition (Widyaningsih, 2018).
Annuity loan fees program (X
Regression coefficient of compatibility of loan size to business needs (X9) of 1.758 indicates that the amount of lendings proposed by MSEs as prospective debtors to fintech is approximately equivalent to their business needs. It is possible, because fintech as an operator has offered a lending value ceiling that is adjusted to the target debtor by considering the risk of credit failure. Likewise when the MSEs apply for credit through fintech, they consider their business needs and their ability to repay the loan.
The analysis enjoys investigated the new determinants from MSEs within the acquiring money from fintech lending. They ends up that the likelihood of acquiring fintech loans in accordance due to their traditional are influenced by how big is social network, financial attributes and risk feeling. The fresh social media factor regarding MSEs sites incorporate points because of social media is one of the considerations for loan providers in the bringing lendings as needed. To attenuate the potential danger of people (lenders), fintech financing operators and you can lenders get recommendations regarding individuals on line authentications, social networking and you may social networks, where this type of points become more several and simply accessible via the internet sites. A few of the pointers extracted from internet sites might possibly be made use of just like the a guide in the process of examining creditworthiness of these prospective debtors from the fintech credit.