A study on legal improvement on Online P2P financial loan

Along with the recent growth of Fintech industry and low interest rate basis, one of the alternative investment technique for expecting higher investment profit, P2P loan using P2P financial system is greatly increasing. P2P loan can be referred to as a type of Crowdfunding that the law of Crowdfunding (adopted to revised Capital Market Act) enacted on January 25th 2016 only allows investment type Crowdfunding so that it can be used as a tool of raising fund for startup and venture companies. Also, it is true that Korean government could not make any legislative foundation related to P2P loan. At this moment, those online platform companies mediating P2P loan are not included as financial companies, expected to cause various legal arguments. Financial Services Commission has released a guideline in February of this year saying that limit of P2P loan is 10 million Korean Won per arbitrating company and 5 million Korean Won per borrower. However, what is more important is to make a law supporting this institutional system. If legislation on P2P loan is implemented without care, it may disturb growth of the field but it may result in the damage of investors if not clearly defined by law. As this is the case, first, "revision of execution regulations for loan business" should take place as soon as possible to intensify inspection of loan companies by registering them to Financial Services Commission. Second, saving customer fund separately in the their organization. Third, making law on protecting investors such as regulating exaggerative advertisement. Fourth, to have transparent and fair public announcement system, standardized agreement and guideline describing clear understanding on autonomous public information publication of P2P loan online platform business and information on the borrower.