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The Challenges of Islamic Peer to Peer Lending as The Alternative Solution To Financial Technology based on The Peer to Peer Lending Service in Indonesia
Dewi Nurul Musjtari (1), (2) Fiska Silvia Raden Roro, (3) Rofah Setyowati

(1) Faculty of Law, Universitas Muhammadiyah Yogyakarta, dewinurulmusjtari[at]umy.ac.id (2)Faculty of Law, Airlangga University, Surabaya, fiska[at]fh.unair.ac.id (3)Faculty of Law, Diponegoro University, rofahundip[at]gmail.com


Abstract

The main attention of the authors to this research are the challenges of Sharia Financial Technology (fintech), especially the online loan service industry (Peer-to-Peer lending fintech service) to the financial regulations and the alternative solutions to solve the problem. The type of research method is normative research. This research used the statutory approach and conceptual approach which are obtained from library research. Moreover, this research also uses an empirical juridical method which is based on interview results. The challenges, in conventional Peer-to-Peer lending system, there is economic immorality in their applications such as maisyir, gharar, riba, and dhalim acts. It is completely different from Sharia Fintech which has sharia compliance as the main principles, which is outlined in several rules in facing the challenges of Islamic peer-to-peer lending. As the alternative solution to financial technology based on the peer-to-peer lending service in Indonesia, the challenges of Islamic P2P lending are illegal fintech, intimidating debt collection the high level of the interest rate, and illegal personal data usage. Therefore the elements of Sharia Compliance Principle and the Obedience Principle are the alternative solutions in order to reinforce Sharia Fintech which will provide protection to the consumers. Furthermore, these principles are recommendations for the government in order to immediately complete satisfactory financial regulation and to develop competent and capable human resources in sharia or in Islamic Economics Law.

Keywords: Challenges, Sharia Fintech, Peer to Peer Lending, Alternative Solutions.

Topic: ASIAN Conference on Comparative Laws

Link: https://ifory.id/abstract/DTr9UkKCGxMj

Conference: The 3rd International Conference on Sustainability and Innovation (ICoSI 2019)

Plain Format | Corresponding Author (Dewi Nurul Musjtari)

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