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P2P lenders create thousands of jobs, reduce poverty: Study
P2P platforms have provided jobs for more than 362,000 Indonesians and reduced the poverty rate by 0.7 percent, equal to 177,000 individuals.
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Illustration of financial technology (fintech). (Shutterstock/File)
P
eer-to-peer (P2P) lending platforms have created thousands of jobs and reduced poverty as the online lending companies have provided access to financing in cities and remote areas alike.
According to a study conducted by local think thank Institute for Development of Economics and Finance (Indef) and the Indonesian Fintech Lenders Association (AFPI), P2P platforms have provided jobs for more than 362,000 Indonesians and reduced the poverty rate by 0.7 percent, equal to 177,000 individuals.
“P2P lending enables MSMEs [micro, small and medium enterprises] to boost production and thus can directly impact the country’s gross domestic product [GDP],” said Indef researcher Izzudin Al Farras in Jakarta during the launch of the study on Monday. P2P platforms have contributed Rp 60 trillion (US$ 4.28 billion) to GDP as of June.
“MSMEs then need more workers to boost their productivity as we estimated that P2P platforms have created more than 362,000 jobs […] The platforms are also [able to] boost consumption, which has resulted in many people lifting themselves out of poverty,” Izzudin told The Jakarta Post.
The study compiled data regarding Indonesia’s economic growth and poverty rate from Statistics Indonesia (BPS) and the World Bank from 1970 to 2017 to assess the impact of economic growth on poverty, according to Izzudin.
Read also: Fintech boosts financial inclusion by creating access for unbanked: Survey
“We multiplied the coefficient parameter with P2P platforms’ total investment and loan activities toward poverty and inequality to acquire the estimated number,” said Izuddin about the study’s the methodology.
