Legal Challenges and Opportunities in Peer-to-Peer Lending: Ensuring Financial Diversity and Sustainability in the Digital Economy

Peer-to-peer lending as part of fintech has grown rapidly in the digital economy era, offering a more inclusive and flexible financing alternative. While peer to peer lending provides an opportunity to promote financial diversity and inclusion, legal challenges remain an obstacle to realizing the platform’s full potential. This article examines the legal challenges faced by the peer to peer lending sector, including regulatory ambiguity, consumer protection, data security risks, and cross-jurisdictional compliance issues. Additionally, this article explores the opportunities offered by adaptive regulation and collaboration between stakeholders to create a legal environment that supports the sustainability of the sector. With a comprehensive analysis of the legal framework and recent developments, this article offers insights into how peer-to-peer lending can evolve sustainably, while ensuring consumer protection and market stability. These findings are expected to make a significant contribution to the development of legal policies that support technological innovation in financial services.