Elephant Club, the first hybrid fund peer lending platform in HK

Hong Kong may have strict regulations concerning internet lending but some fund managers have found ways around this while still complying with the law by combining the structure of a fund with a form of internet lending.

Veteran fund manager Charles Li Tak-kwong, co-founder and managing director of Elephant Club, said his company is a combination of a fund and a peer lending platform.

“We have to structure Elephant Club this way so as to follow all the local law requirements and to boost the confidence of investors. We believe this model will be the way forward for Hong Kong internet financing,” Li told the South China Morning Post at the launch of the Elephant Club recently.

Globally, lending through online platforms reached US$60 billion last year and is forecast to reach US$290 billion by 2020. In many overseas markets, such as the US, peer-to-peer lending allows lenders to loan money to borrowers via online services.

However, in the US and mainland China, such services have been hit by fraud and bad debt problems but Li believes the Hong Kong version could work well.

“These overseas models cannot be introduced in Hong Kong because it is illegal to do so here. Under Hong Kong law, anyone who lends money as a business needs a money lender’s licence from the Hong Kong police and without that no one can lend money via the internet,” he said.