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FinTechs belonging to this category act as a loan creditor (even short and very short-term loans), are broking loans or receivables or conduct factoring of loans, which were given to private or business customers. In this business area you also find “peer-to-peer” (P2P) services, in which FinTechs enable a multitude of users to give loans (and brokered by the FinTech-platform) to other users or companies.
Finetrading is hereby a financial service of FinTechs, where they buy due receivables and grant the debtor an extension of payment time.
As an ancillary service some FinTechs offer alternative credit assessment services to check the solvency of a borrower.
Introduction
Attitude of the country towards loan-giving-, factoring-, brokerage-, finetrading- and ancillary services
In Albania, the non-bank financial institution market (NBFS) (i.e. loan-giving, factoring, finetrading or financial leasing, brokerage, and ancillary services) is a fully regulated financial activity by the central Bank of Albania – i.e. BoA.
According to BoA data, all financial sectors saw increased activity in the first half of 2024. Non-bank financial institutions that exercise lending activities reported expansion of the activity, better financial performance and a good level of capitalization. Total assets increased by ALL 4 billion (approx. EUR 40M), reaching ALL 68 billion (approx. EUR 680M). By sectors of the economy, the most financed sectors are the sector of other activities and the sector of wholesale and retail trade (by around 22% and 18%, respectively), followed by construction (10%). Credit to households accounted for 52% of total loans, while the rest was granted to enterprises. Credit quality increased during the period, and CAR dropped at 12.8% from 13.3% a year earlier. NBFIs reported a positive financial result (around ALL 1 billion approx. EUR 10M) at the end of the period, lower than the level in the previous year (ALL 1.8 billion approx. EUR 18M).
Legal affairs
Obligations and requirements to provide loan-giving-, factoring-, brokerage-, finetrading, and ancillary services described above
The non-bank financial institutions that can offer this category of FinTech services (in addition to traditional commercial banks) are licensed pursuant to Regulation "On Licensing and Activity of non-bank financial institutions" of the Bank of Albania. Under this Regulation, BoA is the sole competent authority to license non-bank financial institutions to carry out one (1) or more activities as follows: i. lending of all types; ii. Factoring; iii. Leasing; iv. guarantees and commitments; v. foreign exchange; and vi. advisory, intermediation and other auxiliary financial services.
The application to obtain a license as a non-bank financial institution shall be submitted to BoA in writing along with standard documents such as bylaws, capital evidence, business plan, and internal regulations/instructions etc.