More recently we looked at Japan: back in May the country’s Prime Minister launched a reform that would allow startups and private companies to raise finance through equity crowdfunding portals, but nothing was said about P2P lending, which is actually present in the country and it is organically developing. In fact a few P2P platforms are operating in the market, with the first one having started its activity back in 2007. Since no specific regulation yet exists for P2P lending, the market actors have to adapt to the current legal framework, according to which any legal entity (person or company) which lends money in Japan must register under the Money Lending Business Act. This implies that the investors cannot directly lend money to borrowers, because they would need to register under the aforementioned Act, and therefore lenders invest in the platforms which then lend capital to single borrowers as operator of investment funds.
Japanese P2P lending growth is however slow. The main reasons are to be found partly in the lack of a specific regulation for P2P platforms and mostly in the fact that the traditional lending system is working better than in Europe and in the US: Japanese banks are lending quite aggressively and the national lending interest rate of banks is around 0.887%.
Although it looks like in the Far East P2P lending is encountering some difficulties during its initial phase, we believe there is still a good opportunity for it to find its way into the market, if not as a general lending actor, at least as a specialized borrower for a determined market niche.
Cels, J. (2014). Japan Promoting Crowdfunding in New Bill
Sugyiama, T. (2014). P2P Lending In Japan – The Current Situation. P2P Banking.com
Tordera, I. (2014).Will Crowdfunding and P2P Lending Ever Establish in China?
Image credit to: DigitalLyte. http://bit.ly/1ophbdQ
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.