The Securities and Exchange Commission of Pakistan has issued a consultation paper on the challenges and potential of peer-to-peer (P2P) and crowd lending in Pakistan, alongside proposed amendments to the Non-Banking Finance Companies & Notified Entities Regulations, 2008, aimed at expanding access to alternative finance. The review flags constraints on market growth including the lack of securitized lending mechanisms, restrictions on eligible participants, limited credit risk diversification options, and operational issues around escrow account management. Proposed reforms include higher loan ticket sizes and exposure limits, stronger governance requirements for non-banking finance companies (NBFCs) operating as P2P service providers, measures to support platform financial sustainability, a trust account structure for fund management, enhanced risk disclosures, and new information technology and cybersecurity standards for platforms. The package also proposes revised definitions for SME/MSME and microenterprises, stronger credit bureau reporting for lending NBFCs, changes to the Code of Corporate Governance for lending NBFCs, and relaxed fit and proper criteria for fintech startups in lending. Comments are requested from stakeholders and the public by June 20, 2025, with the consultation paper and draft notification available on the SECP website.

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