The National Bank proposes the banking community, professional associations, the Verkhovna Rada Committee on Financial Policy and Banking, and relevant departments to discuss and form the consolidated position regarding the legislative regulation of the question on attraction of funds of clients in interests of third parties through using the fiduciary management tool and provision of consulting services on searching for potential individual borrowers, the regulator’s press-service reports.
“Online services on P2P individuals lending as well as platforms on collection of financing for companies were widely developed in the world. As of today, the global lending volume is 64 bln dollars, and in 2020, as per estimates of analysts of Morgan Stanley, can reach USD 300 billion”, - Deputy Chairwoman of the National Bank Ekaterina Rozhkova noted.
However, according to her, such investments are more risky versus the banking deposits, considering that there is no state guarantee of return of funds as well as due to more risky approach to the selection of borrowers (which could not attract funds for less payment at banks).
Some banks of Ukraine have also started using P2P lending tool, offering higher profitability (on average + 5% per annum from base rate on deposits). This allowed to interest the large number of clients and as of April 1, 2016, their volume was assessed as UAH 1.5 bln, including the increase by UAH 0.6 bln in March 2016.
Meanwhile, as it is known, P2P lending does not come within the provisions of the Law of Ukraine On Banks and Banking and is regulated neither by the National Bank, nor by other regulators of financial market.
Without proper regulation the specified bank activities bear significant risks due to absence of responsibility of mediators as well as absence of such deposit guarantees from the Individuals’ Deposit Insurance Fund.
In addition, there are risks of investing funds in borrowers’ loans, the credit risk of which is determined by banks’ policies and is not regulated by the National Bank.
“The National Bank welcomes the appearance of new contemporary tools, however they should be transparent, with calculated risks and regulated legislatively. Therefore, we propose the expert community to find the consolidated decision for work with P2P lending, which will not create obstacles for development, but will protect their clients”, Ekaterina Rozhkova emphasized.
For reference: P2P (Peer-to-Peer) lending is the method of lending funds among individuals, who are not related, without involving the financial mediator (bank, credit unions etc). The loans are usually disbursed with the help of online platform of mediators, who take commission for disbursement of loans and tools for verification of solvency.
