Watch set on crowdfunding, P2P lending

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The Bango Sentral ng Pilipinas (BSP) is keeping an eye on activities such crowdfunding and peer-to-peer (P2P) lending and could issue regulations governing such if needed.

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“The BSP is constantly surveying fintech activities of emerging market players. We are currently monitoring industry developments on crowdfunding and peer-to-peer lending,” central bank Governor Nestor Espenilla Jr. said.

Fintech, or financial technology, is a growing sector where tech advances are used to improve the delivery of financial services.

Internet developments in particular have led to the rise of crowdfunding, where entrepreneurs raise capital via contributions by many people, with attention generated via social media networks or dedicated websites.

Increased online activities have also boosted P2P lending, a method of debt financing where individuals or companies borrow and lend money without the use of an official financial institution as an intermediary.

Espenilla said that while crowdfunding, for instance, had the potential to expand financial access for new businesses and micro, small and medium enterprises, there was also heightened risk of investor and consumer abuse.

“Given the cross-cutting concerns, we have shared our crowdfunding research with other regulators through our FSF,” he noted, referring to the inter-agency Financial Sector Forum composed of the BSP, Insurance Commission, Philippine Deposit Insurance Corp. and the Securities and Exchange Commission.

Since the crowdfunding industry is still nascent in the Philippines, Espenilla said it may be not yet be the time to issue regulations.

“But we continue to monitor the crowdfunding industry and we’ll take regulatory action when the time comes when necessary,” he said.

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