P2P Lending in Mauritius: The emergence of an innovative way to lend and borrow money.
The institutions spearheading financial services have realized, albeit with some delays, the pivotal role fintech can play, not just within the local financial ecosystem, but also for its role in positioning Mauritius as a major investment hub for Africa.
As from September 2018, the Economic Development Board started issuing the Regulatory Sandbox Licenses (RSL) to Fintech companies with innovative projects, having no regulatory stand. On 14 August 2020, the Financial Services Commission, Mauritius issued the Financial Services (Peer to Peer Lending) Rules 2020. The P2P Lending Rules enabled the operation of Peer to Peer lending platforms in Mauritius by P2P Operators which hold Peer to Peer Lending Licenses issued by the FSC. The later was quick to address some issues by amending specific limitations in the rules, in March 2021. The Bank of Mauritius has also come up with several innovations through such services as MauCAS. The Mauritius Research & Innovation Council on its side, is supporting innovations through, among others, the Research & Innovation Bridge (RIB) grant scheme. The Mauritius Revenue Authority (MRA) has come up with several incentives for lenders, who besides making more interest on the platform, now has several tax deduction incentives.
Whist Mauritius remains in a catch-up scenario, recent efforts by regulators is seen to be gathering momentum and efforts from within is critical for this alternative lending market to emerge. The advert in Weekend newspaper of 31st October is a clear illustration of the willingness of some to forge ahead and support this nascent industry.
Two P2P Lending operators tick all the risk and compliances boxes as highlighted in the FSC newspaper post. ?
FinClub (Finance Club Ltd), led by innovation driven entrepreneur / founder Sanjay G. Mungur became the first fintech to secure a P2P Lending license on the 19 February 2021. The FinClub platform started operation by allowing individual lenders to lend money directly to individual borrowers, for loans ranging between MUR 20,000 to MUR 100,000. The product offerings of FinClub is soon to expand, as it has several very exciting, soon to roll-out, innovations in its product features roadmap.
Fundkiss, led by its dynamic co-founder, Paul Perrier obtained its license on the 1st April 2021, and has been instrumental in developing the alternative lending market place, allowing SMEs and Sole Traders ?to obtain quick loans.
The support of the regulators is critical for a fintech sector to emerge and dominate not just the domestic, but potentially the regional markets. Unfortunately, we cannot adopt a complaisant posture, nor move at a snail pace, as the first mover advantage is so critical for an industry that can easily be lost to looming regional and international upcoming players.