Country _ Name
SectionTitle
Loan services / factoring / loan broking / finetrading
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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 (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. 

The economic crisis caused by the pandemic has hampered the expansion of non-bank financial institutions in the country over the past year. The level of loans by non-bank financial institutions has not yet returned to the growth cycle it had before the situation caused by the spread of the pandemic but statistics to date show that lending of non-bank financial institutions is slowly improving. Based on the data provided by BoA belonging to the first quarter of year 2021, the loan portfolio had a value of ALL 39.2 billion – approx. 350 million euro, 1.5% more compared to the same period a year earlier.

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.

The minimum capital required for obtaining a license as a non-bank financial institution is as follows: a) all lending types ALL 100,000,000, approx. 850,000 Euro; b) factoring ALL 20,000,000, approx.170,000 Euro; c) leasing ALL 20,000,000, approx.170,000 Euro; g) advisory, intermediation and  other  auxiliary financial services of all activities ALL 10,000,000, approx. 85,000 Euro. 

Registration costs includes a fee to be paid to the BoA amounting to approximately EUR 250 for license, without including costs for translation services for the documents required from the BoA, lawyers’, and financial advisors’ costs for preparation of these documents which are computed on case-to-case basis.  

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

Currently, there are about 12 commercial banks operating in the b

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