Indonesia Conference Directory

The use of information technology has an impact on the rapid innovation in the field of financial services that has become a trend in Indonesia, and has an impact on changing peoples lifestyles in conducting financial transactions. This condition is in accordance with the demands of a fast-paced community life using information technology. One of the developing financial technology business model is Crowdfunding or peer to peer (P2P) Lending. P2P Lending as a service to help small medium enterprises capital (especially SME-s Start Up) to be able to borrow funds even though they dont have a bank account. However, as a relatively new financial services business, it is certainly not separated from problems, such as legal problems, money lending, data hacking, financial technology business risks such as the risk of default, scam risk, misuse of client data, high interest rates and so on. Financial technology business risk is expected to increase, which is marked by the increasing number of financial technology companies that are closed by the “Otoritas Jasa Keuangan (OJK)” due to various violations. Efforts to reduce these various risks, especially for the P2P Lending model that is held by many individuals, must be managed institutionally, such as limited liability companies or cooperatives. for the second institution there has not been much practice in Indonesia. This study is to study descriptively the phenomenon based on references of technology financial, cooperatives, related regulations and cooperative business practices in the field. So that results can be obtained that there are advantages and at the same time can reduce risk by utilizing cooperatives as executors of the financial services business P2P Lending model. The study shows that, if the P2P Lending model is organized by cooperatives, only changes the conventional financial services business model by using information technology, business entities become formal, service users are members of cooperatives partly as owners that has fund and other members as a user those who need funds (SME-s) thus reducing the risk of default, scam, misuse of client data and interest set cheaper because agreement of members. This study can be concluded that by utilizing cooperative institutions held in accordance with their identity, various problems and risks of financial services business P2P Lending model can be minimized.