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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
Finland generally maintains a positive and supportive stance towards loan-giving, factoring, brokerage, finetrading, and ancillary financial services, viewing them as integral to the financial infrastructure and to the growth of both businesses and the economy. These services are regulated within a clear legal framework that ensures consumer protection, transparency, and adherence to anti-money laundering (AML) requirements.
Legal affairs
Obligations and requirements to provide loan-giving-, factoring-, brokerage-, finetrading, and ancillary services described above
Granting of loans is regulated by the FIN-FSA, and credit providers must comply with the Consumer Protection Act, AML laws, and licensing requirements, focusing on responsible lending. In Finland, authorisation granted by the FIN-FSA is not required to practice the granting of credit alone. However, all credit providers must be registered into FIN-FSA’s register of consumer credit providers and peer-to-peer loan brokers provide consumer credits, and broker peerto-peer loans.
Factoring, used to sell receivables for cash flow, is regulated but not as heavily as lending. Providers must follow AML rules and ensure customer due diligence.
Brokerage is well-regulated, particularly in investment and loan services. Brokers must comply with national law and EU directives like MiFID II, under FIN-FSA supervision.
Though less regulated, finetrading fits within broader financial services, aiding business liquidity like factoring.
Only registered entities are permitted to broker P2P loans. P2P lending and providing platform for such activities falls into the area of consumer credits. Therefore, it is subject to consumer protection laws. The Act on the Registration of Certain Credit Providers and Credit Intermediaries applies to traders who provide consumer credits within the scope of chapter 7 or chapter 7a of the Consumer Protection Act. The Act also applies to traders who broker loans to consumers, where the loan is provided by a lender other than one referred to in chapter 7 or chapter 7a of the Consumer Protection Act (peer-to-peer loan).
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
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Economic conditions