Name
Global FinTech Guide
Country _ Name
Chile
SectionTitle
Loan services/factoring/loan broking/finetrading
Body
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

Although these FinTechs have been increasingly implemented, some of them, especially those related to financing, have encountered detractors among traditional players, such as banks (please see Section e. i. above).


Legal affairs

Obligations and requirements to provide loan-giving-, factoring-, brokerage-, finetrading, and ancillary services described above

There are specific regulations for loan granting (limits on interest rates, mandatory prepayment conditions etc.) and factoring (specific requirements that invoices must meet before being assignable).

If the abovementioned services are not conducted with funds collected from the general public (i.e. banking activity), there would be no need for the FinTech to establish itself as a formal bank in Chile and thus would not be subject to regulations applicable to banks and financial institutions.

Notwithstanding the foregoing, the CMF has established that buying or selling invoices in order to hold them until their due date and demand their payment is not intermediation of financial instruments and therefore does not require registration on the CMF Register of Financial Service Providers. However, it is the intermediation of invoices that would be subject to registration and authorisation by the CMF, i.e. professionally buying or selling invoices for or on behalf of third parties. Therefore, if it is a factoring service, the regulations of the FinTech Law must be applied (registration and authorisation by the CMF, guaranties, minimum capital, among others).


Additional comments regarding the legal situation for loan-giving-, factoring-, brokerage, finetrading-, and ancillary services or what FinTech’s must be aware of in this business area

N/A


Economic conditions

Market size for loan-giving-, factoring-, brokerage-, finetrading- and ancillary services and biggest companies in this business area

In terms of the types of markets where FinTech companies compete, the Lending segment has a 6% share of the start-ups identified (44 start-ups). Finnovista Fintech Radar for Chile 2024: https://www.finnosummit.com/radar/chile-sexta-edicion/.

Information regarding revenues number of transactions and customers is not readily available.


Additional comments regarding the economic situation for loan-giving-, factoring-, brokerage-, finetrading- and ancillary services or what FinTech’s must be aware of in this business area

The scope of the services should be carefully analysed on a case-by-case basis in order to assess any potential risks relating to compliance with consumer protection, data privacy and other laws generally ap

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