Islamabad: The Securities and Exchange Commission of Pakistan (SECP) has released a Consultation Paper inviting feedback on the potential and challenges of Peer-to-Peer (P2P) and crowd lending in the country. The initiative aims to enhance access to finance through proposed amendments to the Non-Banking Finance Companies (NBFC) and Notified Entities Regulations, 2008.

The SECP’s review of the P2P lending framework is driven by the rapid growth of financial technologies and the need for innovative financing solutions. The paper includes a comparative analysis of international regulatory models to guide policy development.

The review highlights several challenges limiting the growth of P2P and crowd lending platforms in Pakistan. These include the lack of securitized lending mechanisms, participant restrictions, limited credit risk diversification options, and operational issues with escrow account management.

To tackle these challenges, the SECP proposes amendments aimed at improving the P2P lending framework. These include increasing loan sizes and exposure limits, enhancing governance requirements for NBFCs, ensuring platform financial sustainability, introducing trust accounts for fund management, improving risk disclosures, and setting IT and cybersecurity standards for platforms.

The SECP is seeking feedback from stakeholders such as P2P platforms, fintech innovators, financial institutions, investors, and the public. This input is expected to shape a regulatory environment that is forward-looking and risk-sensitive.

Additionally, the SECP proposes changes to the definitions of SME/MSME and microenterprises, credit bureau reporting for lending NBFCs, the Code of Corporate Governance for lending NBFCs, and the Fit and Proper Criteria for fintech startups in lending.

The Consultation Paper and draft amendments are available on the SECP website. Comments can be submitted by June 20, 2025, via email to [email protected].