April 27, 2024

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The government is seeking to raise individuals’ investment ceiling for peer-to-peer lending, while bolstering regulations to protect investors, officials said on Feb. 11.

P2P lending is largely unregulated in Korea, but accumulated P2P loans jumped to 4.8 trillion won (US$4.27 billion) last year, compared with 600 billion won in 2016. 

Currently, a person is allowed to invest up to 10 million won in one P2P platform per year.

Yoon Min-seop, a researcher at the Korea Consumer Agency, said the government needs to raise the investment ceiling by allowing the entire P2P lending industry to set a ceiling for its total loans.

Also, the government should consider allowing traditional financial firms to join the P2P lending market, Yoon said.

Yoon suggested the plan at a meeting organized by the Financial Services Commission.

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

By Ram Garikipati and newswires (ram@heraldcorp.com)