Dubai-based Beehive said on Sunday it had become the first peer-to-peer lender to become regulated by the Dubai Financial Services Authority (DFSA), the regulator for the Middle East and North Africa’s largest financial center.
After emerging in response to a shrinking in bank lending following the financial crisis of 2008, peer-to-peer lending is gradually taking off, with loans from such firms globally forecast to reach more than $300 billion by 2020.
In the region, peer-to-peer lending, which allow consumers and small businesses to borrow from investors online, is at a more nascent stage, with lending for businesses still dominated overwhelmingly by banks and other traditional finance providers.
Beehive is one of the few peer-to-peer lenders in the region. Nearly 4,500 investors have provided more than 75 million dirhams in loans via Beehive since the platform launched in November 2014.
Until now it has been based and licensed out of the Dubai Multi-Commodities Center but has not been officially regulated as rules governing the industry in Dubai did not exist until now.
The DFSA last month launched a consultation on its proposed framework for regulating loan-based, crowdfunding platforms.
The regulator’s new rules would provide clear governance for fintech businesses but will also provide added protection for peer-to-peer retail investors, Beehive said.
As part of being officially authorized and regulated by the DFSA, Beehive said it would set up offices in the Dubai International Financial Center.