Trade bodies and peer-to-peer lenders in Bulgaria are leading calls to create pan-European industry standards for the sector.
The Bulgarian Fintech Association is calling for lenders across the continent to support “gold standards” for consumer P2P lending.
The initiative is led by Bulgarian P2P consumer lenders Iuvo Group, Klear Lending, HelpLending and Cashlend.
It is also supported by the European Digital Finance Association and European Crowdfunding Network.
The organisations are holding meetings this week to discuss a best practice code for P2P lenders and the creation of a legal representative entity to implement the proposed standards.
They will also work with the European Commission to make it aware of the new standards.
Platforms involved in the group will need to support investor safety.
“The regulation will provide security to investors and increase the trust in the sector,” the BFA said.
“Higher standards and requirements will guarantee the platforms’ stability during crises.
“Our mutual interest is to help our current and future investors in recognising the scrupulous market players and properly allocating their assets.”
The European Parliament has adopted text on cross-border crowdfunding rules agreed last July by the European Capital Markets Union (ECMU).
The rules are due to be implemented this year.
There will be a €5m (£4.5m) limit on how much can be raised through platforms on each project over 12 months and firms will need to comply with anti-money laundering regulations and be transparent about returns and interested parties.
Similar to the UK regulations, the rules say a limit should be set on how much non-sophisticated investors can invest and they will have to complete an appropriateness test to check they understand the risks.