Abstract
Financial technology centred around peer-to-peer lending (P2P lending) has emerged as a transformative force in South Africa’s financial services landscape. Amid the current economic challenges, P2P lending platforms provide solutions that are proving to be essential for historically disadvantaged groups and low-income households, who traditionally found it difficult to access credit. This access to credit is crucial for protecting the socio-economic rights of individuals, playing a significant role in socio-economic development and alleviating poverty.
This dissertation investigates the “one-size-fits-all” approach adopted by South African regulators concerning P2P lending platforms, focusing on its impact on families whom conventional banking systems have marginalised. It critically examines the implications of the National Credit Act (NCA), particularly its provision that compels all credit lenders to register as official credit providers with the National Credit Regulator. This requirement is designed to ensure rigorous oversight of the credit market and protect consumers. However, non-compliance with this provision renders the credit agreements unlawful and void, raising concerns about the accessibility and reliability of credit for those in need.
The primary aim of this dissertation is to challenge the regulatory perspective on the oversight of P2P lending platforms in South Africa. By analysing various global regulatory frameworks, the research seeks to identify one best suited to South Africa’s unique socio-economic environment. In conclusion, the dissertation argues that the current NCA provision is not lucrative and has, in some ways, expanded the scope of the Act in an unfeasible manner, calling for re-evaluating regulatory strategies to serve vulnerable populations better.
The findings urge a thorough re-evaluation of South Africa’s regulatory framework. They advocate for the development of tailored oversight mechanisms that enhance consumer protection and promote greater financial inclusion across the population. This balance is essential to meet consumers’ needs while supporting access to financial services for underserved communities.