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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

The social and political climate towards loan-giving-, factoring-, brokerage-, finetrading- and ancillary services in Hungary is neutral (no reservations).

Legal affairs  

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

Under the Banking Act, the provision of financial services (i.e. lending and the purchase of receivables inter alia) in a “business-like manner” (as defined above) in the territory of Hungary is subject to regulatory licensing and supervision by the Hungarian National Bank (MNB). Financial service providers established in Hungary shall operate in the form of a credit institution or financial undertaking (jointly: Financial Institution). Firms being resident and holding a financial services licence in an EU member state may provide financial services in Hungary by way of passporting their relevant licence into Hungary or by way of establishing a branch in Hungary. A third country service provider licensed in its home jurisdiction may provide financial services in Hungary through a branch or subsidiary established in Hungary. The branch or subsidiary must obtain a local Hungarian license from MNB. Please note that it shall be examined carefully on a case-by case basis, whether (i) the service provided qualifies as financial or other regulated service; (ii) the service is provided in the territory of Hungary; and (iii) the service is provided in a “business-like manner” (as de-fined above). Brokerage of financial services shall either be licensed by or registered with MNB depending on the type of the broker. With respect to the alternative credit assessment providers, the rules of outsourcing may apply depending on the specific circumstances of the case. 

If a licence will need to be obtained for the provision of financial services from the Hungarian regulator, then the fee for the issuance of such licence will be around: (i) EUR 6’320 in case of credit institutions and third country branches; and (ii) EUR 2’900 in case of financial undertakings. Further, financial service providers shall pay a yearly supervisory fee (in an amount varying and depending on the type of the service provider and its capital or portfolio managed by it). The minimum initial capital requirement of a bank (and third country branch) is approx. EUR 10’530’000, and the minimum initial capital requirement of a financial undertaking is EUR 263’200. The regulatory capital of a Financial Institution may never fall under the amount of the initial capital and credit institutions must comply with detailed capital requirements prescribed by CRD IV, CRR, the Credit Institutions Act and MNB.

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-, f

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