Abstract
Background-Since 2016, the Securities Commission (SC) in Malaysia has given licenses to onlyelevenP2P lending platforms. Such lending platforms are expected to disrupt the lending services of traditional lenders in the coming years. However, being still in their infant stages, it is essential to know the extent to which such platforms are made known to potential investors out there.This study examines the extent to which young adults are aware of Malaysia'selevenP2P lending platforms. Methods-A sample of 65 undergraduate students majoring infinance andaccounting was used for this pilot study. An online questionnaire was designed with three main parts: demographic, financial literacy, and P2P lending awareness. Results-Findings show that more than half of respondents in the sample are not aware of P2P lending platforms in Malaysia. Most of the respondents are financially literate to certain degrees. Those aware of their presence underestimated the potentially high level of their default rates and misunderstood that investor would be fully protected by such platforms when a loandefault. Conclusions-The study's findings have shed light on the current awareness of P2P lending platforms among Malaysian young adults, potential investors of such platforms in the coming years.
Highlights
Starting from North America and Europe, P2P lending has grown aggressively in many Asian countries since 2014, taking up its market share even faster than in developed countries (Stern, Makinen, and Qian, 2017)
With the presence of the eleven P2P lending platforms in Malaysia, the lending services of traditional lenders are expected to be disrupted in the coming years
More than half of them had no idea about the presence of P2P lending platforms in Malaysia
Summary
Starting from North America and Europe, P2P lending has grown aggressively in many Asian countries since 2014, taking up its market share even faster than in developed countries (Stern, Makinen, and Qian, 2017). There are only eleven P2P lending platforms licensed by the Securities Commission (SC) in Malaysia These platforms need to follow guidelines issued by SC, from which all of them must be incorporated under the Companies Act 1965 with a minimum paid-up capital of RM5 million. P2P lending platforms cannot place funds received from lenders into their accounts instead of in a third-party account. Directors of those P2P lending platforms must prove themselves fit and proper to manage the business. All these requirements help to prevent future fraud caused by these platforms
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