On October 31, 2019, the National Assembly of Korea passed the world’s first legislation focused specifically on P2P or marketplace lending. The Act on Online Investment-Linked Financing (P2P Act) will go into effect this month, November.

The regulation aims to clarify legal grey areas of lending to individuals or businesses through online services.

The law outlines that one of the requirements to receive a government-approved licence is having a minimum capital of W500 million. P2P lenders must also distinguish between their working capital and funds raised via their online lending platforms.

The P2P Act is the first finance-related law to be promulgated in the country since the enactment of the Specialised Credit Financial Business Act in 2002.