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24 J. Legal Ethical & Regul. Isses 1 (2021)
Adoption of Financial Technology in Crowdfunding as Business Financing in Indonesia

handle is hein.journals/jnlolletl24 and id is 1354 raw text is: Journal of Legal, Ethical and Regulatory Issues ADOPTION OF FINANCIAL TECHNOLOGY IN CROWDFUNDING AS BUSINESS FINANCING IN INDONESIA Paramita Prananingtyas, Universitas Diponegoro Irawati Irawati, Universitas Diponegoro\ ABSTRACT Crowfunding is a type offinancial technology platform that funding a project or venture by raising money from a large number ofpeople. There are three actors in crowdfunding, first is the project owner, second is the crowdfunder and third is the donator. As a new way of raising money for business financing crowdfunding is very interesting subject to discuss. This paper is a research paper, to analyze the utilization of crowdfunding in business financing in Indonesia and to analyze the obstacle of crowdfunding in business financing in Indonesia. The methodology of this research is an empirical legal research. The research finding are Indonesian business association already utilized the crowdfunding platform to finance several business sectors such as realestate, modern store franchise, movie production etc. The obstacle of crowdfunding utilization was the absence of financial technology regulation, including the crowdfunding regulation, many investors did not understand about the crowdfunding platform scheme and its risk. Keywords: Crowdfunding, Business-Financing, Financial-Technology, Regulation. INTRODUCTION Indonesian state financial institutions consist of three institutions, namely banking financial institutions, non-banking financial institutions, and other financial institutions. Banking financial institutions alone are not enough to answer the economic problems that occur because there are still many entrepreneurs in Indonesia who experience capital constraints in developing their businesses (Cumming et al., 2019; Garcia-Teruel, 2019). Entrepreneurs need investment credit as a supporter of the costs of developing a business but getting investment credit from a bank is not easy because the bank asks for sufficient collateral in loan lending (Gleasure, 2015; Brown et al., 2019; Rupeika-Apoga & Danovi, 2015). Banks need to be accompanied by other financing services so that all sectors are accommodated to their needs (Cumming et al., 2019). This relates to the limitations of banking, namely the limited funds channeled, limited outreach and limited opportunities to enter other financing sectors. This problem can be overcome by non- banking financial institutions, namely funding institutions that have a risk level for debtors tend to be smaller than banking financial institutions. Non-banking financial institutions are known as financial institutions that offer new formulation models in channeling funds to those who need them. These financial institutions, including finance companies, venture capital companies, and infrastructure financing (Brent & Lorah, 2019; Bento et al., 2019). 1544-0044-24-6-752 Volume 24, Issue 6, 2021 1