Regulating peer-to-business lending in Canada

Peer-to-Business Lending (P2BL) is a sub-set of the Financial Technology (Fintech) sector that allows investors to lend money to businesses through online portals run by a third party. P2BL provides a potential alternative source of financing for Canadian small businesses that are underserved by traditional financial institutions. However, Canada’s adoption of P2BL, measured in values of loans issued, significantly lags many of its peers who have developed mature online lending industries. This study focuses on Canadian securities regulation applicable to P2BL to identify issues with the current regulatory regime. A case study methodology is used to examine the United Kingdom, Singapore, and Australia to identify potential policy options to implement in Canada. These policy options are analyzed to determine responsible ways encourage innovation and growth in the Canadian P2BL sector.