ANALYSIS OF FACTORS AFFECTING APPROVAL OF APPLICATION FOR MICRO, SMALL AND MEDIUM ENTERPRISES CREDIT AT PEER TO PEER LENDING FINANCING INSTITUTIONS DURING THE COVID-19 PERIOD

Abstract

The purpose of this study is to analyze what factors affect the approval of MSME loan applications at peer to peer lending institutions during the COVID-19 period. This study uses secondary data sourced from peer to peer lending websites, the ministry of cooperatives and micro, small and medium enterprises, news reports on fintech developments using descriptive analysis techniques and probit regression assisted by data processing through the IBM SPSS Statistics 25 application. The dependent variable used by the researcher namely the approval of the loan application which includes a dummy variable while the independent variables used in the study are the loan amount, length of business and credit period. The results of this study found that the number of loans and credit terms had a negative and insignificant effect on approval of credit applications, while the length of business had a positive and significant effect on approval of credit applications. Through this research, it is hoped that it can help MSMEs to apply for financing at peer to peer lending institutions.