This paper proposes an original view to determine the effect of P2P loans on MSME and non-MSME bank loans after the COVID-19 pandemic as a whole and then focuses on the island of Java (more developed areas) and outside Java (areas which are still undeveloped). The approach used in this study uses panel data regression from 33 provinces in Indonesia during Jan-Dec 2022 after the COVID-19 pandemic. The results of this study confirm that P2P lending is not a disrupter for bank credit, the details of the results are: (1) P2P lending has a significant positive effect on overall MSME banking credit, but has no significant effect on overall non-MSME banking credit; (2) P2P lending has no significant effect on MSME banking credit in Java, but has a significant positive effect on non-MSME banking credit in Java after the COVID-19 pandemic; (3) P2P lending has a significant positive effect on MSME banking credit outside Java after the COVID-19 pandemic, but has no significant effect on non-MSME banking credit in Java post the COVID-19 pandemic.

The market share of peer-to-peer (P2P) has shifted from dominating the P2P lending for Micro, Small, and Medium Enterprises (MSME) to non-MSME. Meanwhile, non-MSME credit is an incumbent main market share banking which possibly makes it a complementary or substitution in P2P lending in non-MSME bank credit. Furthermore, optimizing and maintaining liquidity is important due to banks utilizing intermediation functions. The strictness of bank liquidity could determine the management’s response and policy in determining the best timing to utilize either the FinTech from the P2P platform or the customer’s existing funds first. This study aims to assess the empirical findings of the effect of P2P lending on banking credit that is divided between provinces with strict, normal, and lax liquidity. This study uses data from 33 provinces in Indonesia between January 2022 to December 2022. The study approach uses a regression data panel for the data analysis. The results of this study show that P2P lending positively and significantly impacts bank credits of non-MSMEs in provinces with lax bank liquidity. The stricter the banking the lower the compliments of P2P loans against the bank credits of non-MSME. To the author’s knowledge, no existing studies investigate the P2P lending of non-MSME banking credit that also consider the level of strictness of banking liquidity.