Deputy Prime Minister Vuong Dinh Hue has asked for inspections and settlement of violations related to peer-to-peer (P2P) lending model. (Photo: VOV)Hanoi (VNA) – Deputy Prime Minister Vuong Dinh Hue has asked competentministries and sector to enhance inspections, supervision and settlement ofviolations related to peer-to-peer (P2P) lending model which has been springingup in Vietnam in recent two years.
At a meeting in Hanoi on March 6, Hue ordered evaluation of the current operationsof 40 companies providing P2P lending services, and asked the State Bank of Vietnam(SBV) to outline documents covering risk management of the model as well asexamination, inspection and responsibility of relevant ministries and sectors.
The Government will mete out harsh punishments to those who disguise this newbusiness model, he said, quoting the 2010 Law on Credit Institutions’ Article 8as saying that “Individuals and organizations other than credit institutionsare prohibited from conducting banking operations, except escrow, purchase andsale of securities by securities companies.”
P2P lending is a method of debt financing that enables individuals to borrowand lend money without the use of an official financial institution as anintermediary but though online platforms. It has experienced a period of fastgrowth since it was first introduced in the UK in 2005.
According to Deputy Director of the SBV’s Monetary Policy Department Nguyen ChiQuang, if P2P lending is well managed, it will serve as a boost for inclusivefinance, particularly in places where residents, household businesses, andsmall and medium-sized enterprises have fewer opportunities to get access tobanking-finance services with low costs.
However, this kind of lending also offers a fertile land for crimes likecheating, and illegal payment intermediary, among others, said SBV DeputyGovernor Nguyen Kim Anh, adding that P2P lending crash in China and severalSoutheast Asian countries is a typical example.
Among 40 P2P providers in Vietnam, some have violated banking and creditregulations, he said.
Currently, the P2P model in Vietnam should not include financial institutionsand P2P firms should not be allowed to mobilse capital for lending, hesuggested.
Anh and leaders from the Ministries of Science and Technology, Planning andInvestment, and Information and Communications agreed that rational legalframework is needed for P2P management.-VNA
VNA
