Behavioral Intention to Adopt Peer to Peer Lending: A Study on Indian MSMEs

The study examines critical factors that may affect peer-to-peer (P2P) lending adoption for Indian micro, small and medium enterprises (MSMEs). To determine the purpose of the study, a conceptual framework is developed by extending the Unified Theory of Acceptance and Use of Technology (UTAUT 2) theory and incorporating an additional construct of "trust". Data for the study were collected from registered Indian MSMEs through closed-ended questionnaires. The responses were analyzed using structural equation modelling (SEM) in AMOS. The study's findings indicate that behavioral intention towards the adoption of P2P lending is strongly influenced by performance expectancy (PE), price value (PV), and trust (TRU). The study suggests that managers of P2P lending platforms should enhance performance expectancy by ensuring financial access to applicants through a higher loan sanction ratio and lower loan denial rates. The price value shall be enhanced for the borrowers by providing economic benefits through cost-effective loans. Moreover, the managers of the platforms shall reach out to the MSMEs through field agents and provide first-hand experience on accessing the platform to build trust in the platforms. In addition, the study also provides valuable insights to regulators and policymakers to improve the adoption rate of P2P lending amongst Indian MSMEs. Overall, the study's results offer a comprehensive insight into the factors affecting the adoption of P2P lending among Indian MSMEs.