SECP allows NBFCs to provide P2P Lending Service

April 4, 2022

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The Securities and Exchange Commission of Pakistan (SECP) has taken a decision to allow non-bank financial credit/licensing companies (NBFCs) to operate as peer-to-peer (P2P) service providers.

Securities and Exchange Commission (SECP) notified SRO 436(I)/2022. Regarding the publication of an amendment to the Regulation on Non-Banking Financial Institutions and Reporting Agencies of 2008.

Under the new rules, “P2P Services” means services provided by NBFC for lending that are permitted under these rules. Facilitate P2P lending transactions through P2P lending platforms and include platform requirements and activities for P2P lending.

According to the announcement, “Peer-to-peer lending or P2P lending” refers to lending by lenders to borrowers through a P2P lending platform, while such platforms are intermediaries that provide P2P services through online brokers or peer-to-peer lending. Lend money to members who have agreements with this platform.

Under the rules, NBFC lenders with valid licenses may apply to the Commission for permission to operate as a P2P service provider if they meet the following requirements:

NBFCs desirous of getting P2P Lending license must have an additional minimum capital of at least Rs 20 million of the amount that the Commission may notify. Plus the minimum capital requirements set out in Schedule 1 of the Non-Banking Financial Companies and Authorized Persons Regulations 2008.
It must have the necessary and proven technological and administrative resources to provide such services to participants.
Must have a business plan that can operate as a P2P service provider.
There must be a reliable and secure IT deployment plan.
It must comply with other terms and conditions what the agency can determine
The scale of the activity of the P2P service provider has shown that it will act as an intermediary, providing its participants with an online marketplace or platform with direct lending and borrowing.