THE INFLUENCE OF PEER TO PEER LENDING EXPERIENCE TOWARDS PEOPLE’S INVESTMENT DECISION MAKING BEHAVIOR IN INDONESIA

• Main Author: Adrianto Apriantono, Jordi
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/48952
• Institution: Institut Teknologi Bandung

Digitalization and disruption of technology have made its appearance towards the financial industry, including in the investment system as peer-to-peer lending. Peer-to-peer lending is an online marketplace where lenders, known as investors, can lend their money to individuals or small businesses. This study aims to analyze the changes in investor’s decision-making behaviour after they have experienced the usage of P2P lending platform as one of the investment instrument. Variables measured as the factor affecting the results are P2P lending experience, cognitive-based trust, affect-based trust, and economic expectation which results in the relation of institutional perceived risk and platform trust. In the end, these latent variables are analyzed using PLS-SEM process to understand how it affects the investment decision-making behaviour through the investor’s overconfidence bias. This research is conducted through quantitative approach to 204 respondents around Indonesia which aim to study the influence of Peer-to-peer lending platforms towards individuals’ investment behaviour and to correctly identify the relationship along with its supporting factors between individuals’ investment behaviour that would lead into investment decisions through peer-to-peer lending experience. The findings from this research show that the usage of the peer-to-peer lending platform does affect the investor as they seek for a riskier investment and have more confidence in doing investment activities although the impact is not highly significant. Furthermore related to the platform strategy, privacy protection leads to the decrease in the perceived risk; thus, lead the investor to invest through a peer-to-peer lending platform with the support from the ease of use of the platform. Keywords: Investment Behaviour, Overconfidence Bias, Peer-to-peer lending, Perceived Risk, Platform Trust