3 additional online investment-linked finance (P2P) approvals… 36 locations

The number of online investment-linked finance (P2P) companies that have received government approval has increased to 36.

The Financial Services Commission announced on the 14th that Lending Machine Co., Ltd., Freesdaq Co., Ltd., and FM Funding Co., Ltd. three companies, as of the 12th, passed the registration requirements under the Online Investment Linked Financial Business and User Protection Act (Online Investment Linked Financial Business Act) as of the 12th. It was announced that it was registered as an online investment-linked financial company (on-to-investment).

The Online Investment Linked Financial Business Act stipulates that on-investment businesses must have equity capital of 500 million won or more and have computerized specialists, computerized facilities, communication facilities, and security facilities.

Lending Machines will operate specialized products for office workers’ credit loans, Freesdaq for unlisted stock-backed loans, and FM Funding for real estate-secured loans.

As of today, 36 on-investment businesses have been registered by the Financial Services Commission. The online investment-linked finance business is a fintech service that connects investors and borrowers online as ‘individual-to-individual finance’. Businesses were operated as loan companies, but on August 27, last year, the Online Investment Linked Financial Business Act came into effect. Last June, three sites, including Lendit, received their first approval.

The online investment-linked finance business is a high-risk product in which the loss belongs to the investor if the borrower fails to repay the borrowed money. If the on-investment company compensates for investor losses or guarantees excessive compensation and high returns, it is highly likely to sell incompletely or handle bad loans. Even when dealing with excessive loans to specific borrowers, the possibility of poor operation and large-scale fraud and embezzlement should be suspected.

As the legal maximum interest rate has been lowered to 20% per annum under the Loan Business Act since July, borrowers must check whether the loan interest including fees exceeds this limit.

A FSC official said, “In addition to 36 companies, we are reviewing the registration of existing companies that have submitted registration applications and new companies who want to enter On2Up. “We are preparing for the possibility of the companies going out of business,” he said.


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