BOT Launches Regulatory Sandbox for P2P Lending Platforms

Source: Regulation Asia Editors, Regulation Asia 2020-06-10

The BOT will seek to use sandbox testing to ensure P2P lending platform providers adopted appropriate risk management and user protection practices.

Platform providers have a responsibility to ensure users do not exceed their debt-servicing capacity – an area the BOT will be directly monitoring in the sandbox.

The BOT (Bank of Thailand) has launched regulatory sandbox testing of P2P lending platforms.

In a statement, the BOT highlighted the role of such platforms as intermediaries to connect lenders and borrowers, providing another option for individuals to access financing at “suitable cost”.

P2P lending platforms also facilitate the creation of loan contracts, loan delivery, loan repayment and debt collection, the BOT noted.

The Ministry of Finance has specified that P2P lending business must be a licensed activity; as such, the BOT is allowing those undertaking such a business to conduct limited testing of their services in a regulatory sandbox environment.

The BOT will seek to ensure appropriate risk management and user protection practices are adopted by platform providers, before they are allowed to apply for a licence to conduct P2P lending business on a wider-scale.

To assess prospective sandbox participants, the BOT places emphasis on the systems and processes they use to support operations, management of technology and security risks, and user privacy.

Platform providers also have a responsibility to ensure users do not exceed their debt-servicing capacity – an area the BOT will be directly monitoring in the sandbox.

Once sandbox participants have successfully concluded tested and are assessed to be ready for deployment of larger scale services, the BOT will refer them to the Ministry of Finance to secure a business licence.

So far one company has joined the sandbox programme, as of 4 June.

P2P

provider

risk management

bank

financing

BOT Launches Regulatory Sandbox for P2P Lending Platforms

Subscribe to Our Newsletter!

Subscribe to Our Newsletter!