P2P lending: Moderation of desirability of control on risk-taking decisions of Indonesian borrowers

The study addresses why Indonesians continue to use P2P lending despite high perceived risks and increasing reports of alleged crimes by lending providers. Prior research typically shows that higher perceived risk reduces intention to use financial technologies. Yet Indonesian P2P lending has experienced rapid growth in credit volume and user accounts. Drawing on risk motivation theory (RMT), the authors propose that the desirability of control—a dispositional tendency to desire control over one’s environment—moderates the relationship between perceived risk and usage intention. Individuals high in desirability of control may downplay objective risks to pursue desired outcomes, whereas those low in desirability of control avoid uncertain, risky situations. The research questions are whether desirability of control moderates the perceived risk–usage intention link in P2P lending, and how it affects risk-taking behavior. Hypotheses: H1, perceived risk negatively affects P2P lending usage intention; H2, desirability of control negatively moderates this effect.

The paper reviews evidence that higher perceived risk lowers behavioral intentions in fintech and related contexts (Abramova and Böhme, 2016; Gumussoy et al., 2017; Mohseni et al., 2018; Mutahar et al., 2018; Ryu, 2018), and that lack of understanding of new technologies can elevate perceived risk (Bauer et al., 2005). Attitudes toward behaviors predict intentions (Fishbein and Ajzen, 1975; Ajzen, 2011). RMT (Trimpop, 1994) identifies desirability of control as an individual factor influencing risk-taking. People high in desirability of control are assertive, active, and prefer to influence situations (Burger and Cooper, 1979), seeking actions they believe afford greater control, sometimes ignoring objective risks (Burger and Schnerring, 1982; Burger, 1989; Faraji-Rad et al., 2017; Hammond and Horswill, 2002). Conversely, low desirability of control individuals avoid risky situations for certainty (Faraji-Rad et al., 2017). Research on fintech user behavior at the group level remains limited (Ryu, 2018), motivating examination of moderating personality factors like desirability of control.

Design: Cross-sectional survey analyzed via structural equation modeling (SEM) using Amos 23, following Kline (2011). Measures: Three scales—(1) P2P lending usage intention (3 items, semantic differential, 7-point scale), developed per Fishbein and Ajzen (2010); pilot on 50 borrowers yielded Cronbach’s alpha 0.921; CFA indicated convergent validity loadings 0.856–0.934, AVE 0.789, construct reliability 0.918. (2) Perceived risk adapted from Ryu (2018), 3 items, 7-point Likert (1=Strongly Disagree to 7=Strongly Agree); alpha 0.792; CFA supported convergent validity (loadings 0.702–0.931), AVE 0.637, construct reliability 0.838. (3) Desirability of control adapted from Burger and Cooper (1979), 3 items on 7-point Likert; alpha 0.940; CFA indicated convergent validity loadings 0.561–0.890, AVE 0.521, construct validity 0.721. Content validity assessed via CVI-S/R; scale adaptation per Gudmundsson (2009). Participants and sampling: N=211 Indonesian P2P lending borrowers (current or past users) recruited via convenience sampling due to limited provider data access. Recruitment through social media groups of undergraduate and graduate students, entrepreneurs, and employees; online informed consent obtained. Age 18–65. Occupational distribution: college students 35.55%, private sector employees 21.33%, government employees 7.11%, entrepreneurs 7.11%, public sector employees 2.84%, professional 2.84%, security service 0.47%, other 22.75%. Procedure: Participants completed the three scales via an online questionnaire. Data analysis: Assessed multivariate normality using critical ratios (c.r.) for skewness, kurtosis, and multivariate c.r. Normality was not supported (c.r. skew −8.931 to −9.826; c.r. kurtosis −2.966 to −6.720; multivariate c.r. 33.625). SEM with maximum likelihood (ML) estimation tested (a) H1: perceived risk → usage intention, and (b) moderation via the interaction term perceived risk × desirability of control (interaction method per Ghozali, 2017; moderation significance per Baron and Kenny, 1986). Significance threshold p<0.05 (reported p<0.001 for main paths). Model fit assessed using multiple absolute fit indices: CMIN/DF, GFI, RMSEA. Due to non-normality and chi-square sensitivity, performed Bollen–Stine bootstrap for model fit adjustment (Bollen and Stine, 1993).

Descriptive statistics (N=211): mean desirability of control m=13.33; perceived risk m=16.21; usage intention m=5.54. Categorization showed most participants had medium desirability of control, high perceived risk, and low usage intention. Multivariate normality was not supported (c.r. skew −8.931 to −9.826; c.r. kurtosis −2.966 to −6.720; multivariate c.r. 33.625). SEM results (ML estimation): H1 supported—perceived risk → usage intention standardized estimate −0.302, SE 0.095, p<0.001. H2 supported—interaction (perceived risk × desirability of control) → usage intention standardized estimate −0.010, SE 0.002, p<0.001, indicating that higher desirability of control weakens the negative effect of perceived risk on usage intention (i.e., individuals high in desirability of control remain more willing to use P2P lending despite risk). Model fit: CMIN 62.613, p=0.000 (not fit), CMIN/DF 2.087 (marginal), GFI 0.946 (fit), RMSEA 0.072 (fit). Bollen–Stine bootstrap p=0.025 (p>0.01), indicating no significant discrepancy between model and data and overall acceptable fit under bootstrapping.

Findings confirm that perceived risk reduces intention to use P2P lending, aligning with prior fintech research. Crucially, desirability of control moderates this effect: borrowers high in desirability of control are less deterred by risk and thus more prone to engage in P2P borrowing, consistent with RMT and prior evidence that high-control-desiring individuals pursue actions perceived to afford control while downplaying objective risks. Contextually, urgent funding needs and the ease and speed of P2P lending can make borrowers feel more in control, reinforcing their intentions despite increased reports of provider misconduct and limited regulatory protections. Conversely, borrowers low in desirability of control give greater weight to perceived risks and avoid P2P lending to maintain a sense of control via certainty. Methodologically, the non-normal distribution due to convenience sampling affected the chi-square test; using Bollen–Stine bootstrapping and robust fit indices supported the model’s adequacy. These insights suggest that personality factors, particularly desirability of control, help explain risk-taking borrowing decisions in high-risk fintech environments.

The study demonstrates that desirability of control negatively moderates the relationship between perceived risk and intention to use P2P lending in Indonesia. Higher desirability of control weakens the deterrent effect of perceived risk, leading high-control individuals to persist in using P2P lending despite risks, while low-control individuals avoid it. The work contributes by highlighting a personality-based moderator of fintech usage under risk and by providing group-level evidence on borrower decision-making. Practically, regulators should consider tightening lending procedures to ensure loans are extended to borrowers with repayment capacity, as cognitive-focused consumer education may be less effective for those high in desirability of control.

Primary limitations include the use of convenience (non-probability) sampling, driven by data protection constraints, which led to non-normal data distributions and necessitated bootstrap-based model fit adjustments. This limits generalizability and may bias parameter estimates under standard ML assumptions. Future research should collaborate with government agencies and fintech firms to enable random sampling while respecting data protection, thereby improving representativeness and analytical accuracy.