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. 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 https://servicecashadvance.com/title-loans-ca/ 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.
Ergo, fintech will evaluate one after the other having AI technical prior to holding aside borrowing summary in order to mitigate the danger borrowing that can’t end up being 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 mortgage 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 brand new determinants from MSEs during the acquiring financing off fintech credit. It concludes your likelihood of getting fintech funds in accordance along with their expectations are affected by the size of social network, monetary services and you may risk impression. The brand new social media basis about MSEs sites utilize circumstances thanks to social media is among the factors having loan providers into the bringing lendings as required. To reduce the potential risk of buyers (lenders), fintech credit workers and loan providers receive suggestions of various on the web authentications, social network and you may internet sites, where these items be more several and simply obtainable via the internet. A few of the pointers taken from sites might be put since a reference undergoing evaluating creditworthiness of these possible debtors from the fintech financing.