P2P lending is becoming institutionalized in global financial centers.
In Britain, P2P lending started in 2005 and more than £500m of P2P loans are expected to be arranged this year. In fact, the Bank of England was candid to suggest that “these new kids on the block could become a major force in the financial market” (The Telegraph, 3 Mar 2013, “Can you trust peer-to-peer lending?”).
The growth of the US P2P lending industry since 2006 has also been so phenomenal that traditional banks’ current share of all lending in the US may only be 25% (Investopedia, 6 Feb 2013, “Peer-to-Peer Lending: Determining The Future of Banking Across The World”). The P2P lending movement is real and global: an Economist article mentioned that a sovereign wealth fund was willing to put USD 250m on Lending Club platform to fund loans!
So, you can’t imagine my disbelief when I first googled “peer-to-peer lending in Singapore” and there were no relevant hits. Is the absence of P2P lending in Singapore a result of the strict regulatory regime?
I thought the letter by the Monetary Authority of Singapore (MAS) in response to greater supervision on alternative investment schemes (published in the Forum section of The Straits Times on 17 Apr 2013) might be a good reference point on my above question. I am encouraged to read that the MAS will strive to strike a “right balance” between investor protection and financial innovation in their ongoing review of the regulatory framework.
Does that mean P2P lending might be a possibility in Singapore?
This is a BIG topic. Let’s start chatting.