The Pakistan Securities and Exchange Commission (SECP) has approved to enable lending/licensed Non-Banking Finance Companies (NBFCs) to operate as Peer-to-Peer (P2P) service providers.
On Monday, the SECP issued a S.R.O.436(I)/2022 notifying the issuance of draft modifications to the Non-Banking Finance Companies and Notified Entities Regulations, 2008.
According to the new laws, “P2P Services” refer to the services provided by a lending NBFC licensed under these regulations for facilitating P2P lending transactions through the P2P lending platform, which would comprise the supply of the platform as well as P2P lending-related activities.
According to the notification, “Peer-to-Peer Lending” or “P2P Lending” shall mean the extension of loans by the lender to the borrower via the P2P Lending Platform, where the Platform would be an intermediary providing P2P service via an online medium or otherwise to the participants who have entered into an arrangement with that platform to lend or borrow money.
The laws state that a lending NBFC with a valid license may apply to the Commission for authorization to operate as a P2P Service Provider, subject to the following conditions:
- It shall have a minimum additional equity of Rs. 20 million or such higher amount as the Commission may notify, over and above the minimum equity requirement as specified under schedule I of Non-Banking Finance Companies and Notified Entities Regulations, 2008.
- It shall have the necessary demonstrable technological, entrepreneurial, and managerial resources to offer such services to the participants.
- It shall have a viable business plan for conducting the business as P2P Service Provider.
- It shall submit a plan for the implementation of a robust and secure Information Technology system.
- It shall comply with any other condition as may be required by the Commission.
The P2P service provider’s scope of activity disclosed that it will function as an intermediary, providing an online marketplace or platform to participants for direct lending and borrowing.
To read our blog on “PM has launched Pakistan’s first-ever P2P instant payment system,” click here.
