THE IDEAL LEGAL FRAMEWORK FORMULATION FOR PEER-TO-PEER LENDING

Abstract

The massive movement of online loans by peer-to-peer lending is due to several conveniences offered to the public so that people prefer online loans as an alternative in terms of providing funds compared to banks, especially in this Covid-19 pandemic. On the other hand, the convenience obtained by the community also raises several problems that ultimately have an effect on the borrower and lender. This paper focuses on a recommendation for preventive solutions from the negarive effects. To find this solution, the method used in this paper is a conceptual approach and statute approach. Both approaches are used to find an ideal legal framework which in this case will focus on contractual aspects that provide proportional protection for contractors. Strengthening in the contractual aspect by adding collateral for online loans plays an important role. With the inclusion of guarantees for peer-to-peer lending transactions, a business process will ensure legal certainty especially in the economic instability experienced by the community as a result of the pandemic. Given that this online lending has also happened a lot in practice, both starting from a small nominal to a large nominal, it is necessary that all of them must be protected by a guarantee. The positive impact of a good contract will provide clarity starting from aspects of collateral, minimum credit limits, standardization of interest, term, time, service fees and confidentiality of personal data.