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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 Russia, the development of factoring, P2P lending, credit brokerage, and finetrading markets continues. The main factors driving this development include the increasing number of people with internet access, the dissemination of information about financial markets, the growth of online financial platforms providing access to financial markets, the improvement of financial literacy among citizens, the rise in the number of small and medium-sized enterprises and advancements in technology. The number of financial services available to individuals and legal entities in Russia continues to increase year by year, following global trends.
Legal affairs
Obligations and requirements to provide loan-giving-, factoring-, brokerage-, finetrading, and ancillary services described above
The basic legal norms regulating lending are governed by the Civil Code of the Russian Federation, the Federal Laws such as No. 353-FZ "On Consumer Credit (Loan)" dated December 21, 2013, No. 151-FZ "On Microfinance Activities and Microfinance Organizations" dated July 02, 2010, No.190-FZ "On Credit Cooperation" dated July 18, 2009, and No. 196-FZ "On Pawnshops" dated July 19, 2007.
In addition to this, the activities of financial organizations are also regulated by numerous instructions and directives from the Bank of Russia. Furthermore, at the level of each credit institution, there are internal local acts (provisions, instructions, regulations) that regulate the lending process in a specific organization.
Relations related to finetrading and credit brokerage are also regulated by the Civil Code of the Russian Federation.
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
Market size for loan-giving-, factoring-, brokerage-, finetrading- and ancillary services and biggest companies in this business area
The volume of the market for lending and factoring services in Russia is quite significant and continues to develop. Large companies in these areas are VTB Bank, Alfa-Bank, Sberbank (provide loan services, factoring services), as well as T-Bank (provide loan services).