The Effects of Variables Applied in Credit Scoring to Non-Performing Loans in P2P Lending Abraham GP Silaen (a), Maria Ulpah (a)
(a) Master of Management, Faculty of Economics and Business, University of Indonesia, Jl. Salemba Raya No.4, RW.5, Kenari, Kec. Senen, Central Jakarta, Indonesia
Abstract
This study aims to analyze the impact of a relatively new credit market innovation, namely P2P Lending, on the credit market in Indonesia. This study applies several theories, such as Credit Risk and Credit Scoring Theory to determine which theory is suitable for elaborating on the credit market in Indonesia on the development of P2P Lending. The new approach in this research is an analysis system that combines primary data directly from P2P companies to determine which data has the most influence on the Non-Performing Loan Rate. In the discussion, this study will better understand what factors should be prioritized in credit scoring to mitigate NPLs. The results of this study are those female debtors have a risk of 1.481 times more significant for the occurrence of Non-Performing Loans (NPL) compared to male debtors- debtors who have a meager percentage of on-time payments from 0 to 10% have a 1.058 times greater risk of causing Non-Performing_Loans (NPL) compared to debtors who have a percentage of on-time payments higher than 10%, and debtors who have remaining credit below Rp. 1,000,000 has a risk of 1,192 times more significant, causing NPLs than debtors who have credit balances above Rp. 1,000,000, while the province of the debtor, age of the debtor, and credit history does not affect the occurrence of Non-Performing Loans (NPL). In conclusion, to choose good debtors so that NPL does not occur, credit service providers should also pay attention to the factors based on the result. For further research, the research must be conducted by using other application-based credit service providers to further investigate the effect of Local Origin, Gender, Age, Credit History, Percentage of On-time Payments, and Credit Remaining on Non-Performing Loans (NPL) and variations of a longer or even shorter period.
Keywords: Peer to Peer Lending- P2P- Credit Scoring- Credit Risk- Non-Performing Loan- Adverse Selection- Information Asymmetry- Moral Hazard- Financial Technology
