This article aims to answer the question, “Is P2P lending legal in Malaysia?” Taking into account a number of factors, it is not yet clear whether or not this type of lending is regulated. However, it should be noted that electronic contracts and digital signatures are recognized in Malaysia. If this is the case, there are a number of positives to P2P lending, including the potential for stable income.



The Securities Commission (SC) of Malaysia has issued Guidelines for Recognized Markets on 13 April 2016. The guidelines are intended to ensure that the process of P2P lending is compliant with local and international standards. In this article, we discuss the regulatory aspects of P2P, practical issues that arise from its operational mode, and the prospects for P2P in Malaysia. Read on to find out more. Here are some of the key points:

Peer-to-peer lending is a type of crowdfunding in which individuals or businesses obtain loans directly from one another. Different platforms have different types of financing. To apply, businesses must be registered and meet specific requirements. There is a limitation to the number of simultaneous funding, so applicants should carefully consider their needs before applying for a P2P platform Malaysia. In addition, there are stricter regulations for requesting funding.


Impact of financial literacy on awareness of P2P lending

This study shows that respondents with high financial literacy were more likely to consider P2P lending as a viable option for personal finance. The findings show that financial literacy is significantly related to wealth, employment, and savings, and that the higher a person’s financial literacy, the more likely they are to take advantage of P2P lending. However, the negative correlation between financial literacy and the use of P2P lending in Malaysia is still a concern.

Previous lending experience is positively related to knowing at least one P2P financing Malaysia. Those who have previous experience with P2P lending are likely to be more aware of its features and advantages. Higher financial literacy is also associated with higher knowledge of P2P lending, though the relationship is only statistically significant at the 1% level. Higher education levels are also associated with greater P2P lending knowledge.


Validity of electronic contracts and digital signatures

The Securities Commission of Malaysia (SC) is responsible for regulating P2P in Malaysia. In April 2016, the SC issued Guidelines on Recognized Markets to govern the operation of the platform. This article will address regulatory insight on the role of P2P in Malaysia, the practical issues behind its operational mode, and the prospects for this financial service in the country. We begin by reviewing the definition of P2P and its regulatory status in Malaysia.

The Electronic Commerce Act 2006 recognizes digital signatures and electronic contracts. However, the legislation does not specify the type of agreement that can be concluded electronically. Hence, it is important to read the applicable law carefully. Digital signatures and electronic contracts are not void unless they are signed by two parties authorized to do so. While Malaysian law does not explicitly regulate the use of digital signatures and electronic contracts, it does acknowledge that they are legal.


Potential for stable income

While P2P lending is a good way to generate a steady income, there are certain risks involved. The biggest risk is being a beholden to the platform, which can change at any time. The good news is that P2P loans are generally unsecured, which means you can borrow against the cash flow of your business without having to put up any assets or equity in your company. However, you should consider these risks before investing in P2P loans.

The best way to minimize the risk of default is to diversify your portfolio. P2P lending platforms have made this task much easier by involving innovative processes and products. By making smart investments, you can convert your P2P lending earnings into a stable income with minimum effort. While it’s important to remember that P2P lending involves a minimum capital investment, you can earn up to 7-11% per year if you know what to look for.


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