Toronto-based goPeer, a peer-to-peer (P2P) lending platform for consumer loans, has received regulatory approval, allowing it to operate in Ontario and Quebec.
goPeer has been approved as an exempt market dealer in both Ontario and Quebec, making it Canada’s first P2P lending platform focused on individuals rather than businesses. With regulatory approval under its belt, goPeer, founded in 2019, is currently going through internal and alpha testing and is set to launch its platform in the coming months.
“goPeer is on a mission to improve Canadians’ financial well-being by eliminating market inefficiencies.”
In order to receive approval from Quebec’s Autorité des marchés financiers and the Ontario Securities Commission (OSC), goPeer was required to satisfy key regulatory requirements, including assessing investors’ suitability to invest in loans, assessing borrowers’ credit risk, and completing user identity verification and anti-money laundering practices.
“goPeer is on a mission to improve Canadians’ financial well-being by eliminating market inefficiencies and increasing transparency in the consumer lending process,” said Marc-Antoine Caya, CEO of goPeer. “Automating the archaic and laborious loan underwriting process and investor compliance requirements allows goPeer to deliver a seamless experience and better rates to its members.”
P2P lending has become more popular in Canada in the past five years, with Canada’s first P2P platform, Lending Loop, launched in 2015. Others have also entered the market, most often with a focus on business or real estate. goPeer’s regulatory approval is notable, given it is the first Canadian P2P platform approved for lending between individuals.
The idea behind goPeer is that by cutting intermediaries, such as banks, out of consumer lending, the company’s platform can connect credit-worthy users with eligible investors to enable better rates for both the borrower and lender.
Caya argued that removing intermediaries offers a unique opportunity for Canadians, and that half of Canadians surveyed would prefer the interest paid on their loan to benefit a peer rather than a bank.
The loans through goPeer come from individuals looking to invest in other individuals. People can lend as little as $10 per loan and earn monthly repayments of capital and interest.The CEO noted that goPeer is committed to maintaining “the highest professional standards;” through the platform both lenders and borrowers must be approved as qualified consumers.
goPeer’s regulatory approval comes at a time when Canadian FinTech companies are facing major challenges surrounding financial regulation. According to a recent report by Ernst and Young, one of the most widely-cited reasons for Canada’s lagging global position in FinTech is regulation.
Image source Unsplash. Photo by Austin Distel.