With the Act on Online Investment-linked Financing scheduled to take effect on August 27, 2020, the volume of peer-to-peer lending has continued to grow as well as its default rate. Against this backdrop, the government has issued an investor alert to urge investors to use caution before investing in P2P loan products.

Investors should be aware of the risks associated with P2P loan products as they are high-risk, high-yield products with no principal guarantee.

The FSC will work to promote the development of a sound P2P lending ecosystem while closely monitoring the P2P lending firms’ compliance with the relevant guidelines to help minimize the information asymmetry existing in the market. For any unfair sales practices or incidents of fraud or embezzlement, the financial regulators will take stringent measures through on-site inspections.

Note to Investors

► P2P loan products are not principal guaranteed and investors are responsible for their losses on their investments.
► Investors are advised to check whether P2P lending firms are registered with the FSC.
► Investors are advised to check P2P lending firms' financial data and other relevant records prior to investing.
► Investors should approach with caution P2P lending firms with excessive investment events.
► Investors are advised to check the details of disclosed information when considering investment in P2P real estate lending.
► P2P loan products are high-risk, high-yield products, thus investors are advised to follow small sum and dispersed investment strategies.

* Please refer to the attached PDF for details.