BoT reviews P2P lending

BoT reviews P2P lending

The Bank of Thailand is mulling whether to regulate peer-to-peer (P2P) lending now that the innovative funding tool is gaining in popularity.

The move came after requests by six or seven local financial technology (fintech) operators, most of them nanofinance companies, said central bank deputy governor Tongurai Limpiti.

P2P is a platform that allows borrowers to receive money directly from individuals or institutions online.

Regulation of P2P lending may be needed because it is personal lending and concerns consumer security, she said. 

"Fintech will fill a gap in banking services. Banks are aware of financial innovation and some are setting up fintech companies to capitalise on the trend," Mrs Tongurai said.

Two large players -- Kasikornbank (KBank) and Siam Commercial Bank (SCB) -- has already won central bank approval to incorporate technology subsidiaries. KBank set up Kasikorn Business-Technology Group (KBTG), while SCB created Digital Ventures to take advantage of opportunities.

Some banks chose to upgrade their existing technology unit rather than set up a subsidiary.

Non-bank fintech operators can be competitors and partners of banks at the same time, she said. 

Punnamas Vichitkulwongsa, chief executive of Ascend Group, an e-commerce and e-payment service provider under True Corporation, said his company was considering two business models -- going solo or partnering with a financial institution.

"It would be better if fintech was under central bank regulation to standardise operations and control consumer risk," he said.

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