Gov’t to tackle du­bi­ous P2P lend­ing

The Korea Times - - BUSINESS -

The govern­ment will an­nounce mea­sures to tackle abu­sive and de­cep­tive peer-to-peer (P2P) lend­ing prac­tices amid a rise in the num­ber of fraud cases be­ing re­ported in the sec­tor, of­fi­cials said Thurs­day.

Kim Yong-beom, vice chair­man of the Fi­nan­cial Ser­vices Com­mis­sion (FSC), said dis­putes be­tween in­vestors and P2P lenders are on the rise with some P2P firms il­le­gally rais­ing funds.

Lax reg­u­la­tion on en­try into the P2P sec­tor is one of the rea­sons for such prob­lems, Kim said.

Ac­cord­ing to data compiled by the FSC, the ac­cu­mu­la­tive value of P2P lend­ing jumped to 3.5 tril­lion won ($3.23 bil­lion) at the end of May, from some 40 bil­lion won at the end of 2015.

Dur­ing the same pe­riod, the num­ber of P2P firms rose to 178 from 27, the FSC said.

Last year, the govern­ment tight­ened guide­lines for P2P lend­ing, ban­ning a per­son from in­vest­ing more than 10 mil­lion won into a P2P firm.

P2P lend­ing refers to a new type of loan ex­ten­sion to in­di­vid­u­als or busi­nesses through so­cial net­work ser­vices, or the In­ter­net, and cov­ers a wide range of ser­vices, in­clud­ing loans to star­tups and self-em­ployed busi­ness­men.

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