Peer-to-Peer P2P Financing Legal Framework in Malaysia

In Malaysia, the SC has stipulated stringent legal requirements for platform operators, including that they must be a Malaysian-incorporated entity with a minimum paid-up capital of 5 million Ringgit Malaysia (US$1,212,000). They also need to implement risk scoring systems, conduct issuer risk assessments, and institutionalize processes to manage default by issuers. There are some exceptions to these requirements, however.

Regulation of P2P platforms

The Malaysia Securities Commission (MASC) has recently issued guidelines on the regulation of peer-to-peer P2P platform Malaysia. These guidelines require legal recognition, minimum capital requirement and risk-scoring system. In May 2017, the MASC registered five new P2P platforms and approved 11 others. This article will explore the Regulatory Insight and practical considerations of this operational mode.

The new regulations will also require P2P operators to have processes and policies to manage default by issuers. Moreover, the rules stipulate that they must make every reasonable effort to recover amounts owed to investors. The SC expects the operator to maintain an 18% rate of interest. It would be wise to consult the SC before imposing a higher rate of interest. The SC is considering a number of other measures to regulate peer-to-peer P2P platforms in Malaysia.

Various factors affect interest rates. According to a study, the relationship between risk factors and interest rates is significantly different for loans with similar business stage and credit rating. Further, the interest rates charged for loans with longer tenures are higher compared to shorter durations. The study also found that different loans from the same industry charge the same interest rates, despite their similarities. As a result, this regulation can help regulate the P2P platform in Malaysia.

Investment limits

Peer-to-peer (P2P) financing has recently been approved by the Securities Commission Malaysia. The regulation outlines the requirements for P2P platforms, as well as their duties. It also sets out the types of issuers and investors who are allowed to invest in P2P projects. Peer-to-peer financing has the potential to offer both listed and unlisted public companies a way to raise capital on the market.

While many investors are hesitant to invest in P2P platforms, a majority are confident in the potential of the model. The Malaysia Securities Commission (SC) recently announced that five new P2P lending platforms have been registered. This brings the total number of licensed P2P platforms to eleven. Each operator is required to be locally incorporated, have a minimum paid-up capital of MYR 5 million, and maintain a risk-scoring system.


The capital market and services act 2007 regulates P2P. On 13 April 2016, the Securities Commission issued the Guidelines on Recognised Markets (GPRM). In this article, we will look at the regulatory insight of P2P, practical issues behind its operational mode, and the future prospects of P2P in Malaysia. We will also examine the role of the SC in regulating P2P.

In Malaysia, there are eleven P2P lending platforms regulated by the Securities Commission. Although P2P lending platforms offer higher rates of return, individual investors may be exposed to more risk due to higher default rates. Therefore, it is imperative for investors to understand the exposures that they may have to these platforms before investing. This study examines the potential risks of P2P lending platforms in Malaysia.


In Malaysia, the Securities Commission (SC) has regulated P2P financing Malaysia, issuing guidelines on recognized markets on 13 April 2016. This article discusses the regulatory insights and practical issues pertaining to P2P, and the prospects of P2P in the country. Listed below are the key factors to consider before incorporating P2P into your business. They are not intended to be exhaustive.


As the use of peer-to-peer financing platforms is increasing in Malaysia, researchers must determine whether a person’s intention to make use of an online platform contributes to their decision to make a loan. Using a source credibility theory, this study examines whether ease of use contributes to user intentions. If it does, the study concludes that user ease of use is an important factor.


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