The Securities & Exchange Commission of Pakistan (SECP) has approved the launch of the first Peer to Peer (P2P) Lending Platform in Pakistan in a press release issued today. This comes after the formation of the first Regulatory Sandbox cohort to help and encourage the Pakistan Fintech revolution.
P2P lending is a revolutionary digital alternative network that links borrowers to individual lenders who come together to meet the loan requirements of borrowers. The P2P loan enables borrowers to issue short-term loans that allow small and medium-sized enterprises (SMEs) to scale up their businesses and ultimately qualify them for larger bank loans.
The current approval is intended solely to test and experiment with a P2P lending network that could potentially attribute new job creation and business opportunities to the growth of a SME financing ecosystem.
The P2P lending platform will function under pre-defined parameters at the current stage and is subject to certain terms and conditions. For the preference of each lender/borrower on the platform, specific eligibility requirements may also be applied.
The terms and conditions will be reassessed to aid the SECP in creating a regulatory environment in which the FinTech industry will function.