Name
Global FinTech Guide
Country _ Name
Italy
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

Due to the Covid-19-related aid measures to local businesses, especially in the form of grants and moratoria, the loan services and factoring industries thrived in 2020 and 2021.

This kind of services are subject to prior authorisation and are regulated by the Bank of  Italy.

Legal affairs  

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

FinTechs providing loan or factoring services, loan broking services or finetrading shall obtain the authorisation of the Bank of Italy required under Section 107 of the TUB for the carrying out towards the public of the activity of granting credits in any form. This is defined as the granting of credits, including the issuance of substitute guarantees as well as any other type of financing, such as finance leases, factoring, credit for consumers etc. (Section 2 of the Decree of the Ministry of Economy and Finance no. 53 of April 2, 2015). To obtain the authorisation, it is required, among others, that operators are incorporated either as joint stock company (società per azioni), limited partnership by shares (società in accomandita per azioni), limited liability company (società a responsabilità limitata) or cooperative (società cooperativa) and that they have their registered offices in the Italian territory. Specific rules shall, however, apply to the financial intermediaries established in an EU Member State. Moreover, operators are required to have a minimum initial capital equal to:

  • EUR 2 million when the operator provides financing services without issuing any guarantees;
  • EUR 1,2 million when the operator is incorporated as cooperative (cooperativa a mutualità prevalente) and provides financing services without issuing any guarantees; and
  • EUR 3 million when the operator provides issuance guarantees services.

Authorised FinTechs may also be allowed by the competent authorities to provide electronic money services, payment services or investment services. They may also provide other types of activity in the cases permitted by the law, such as provision of and connected/instrumental activities.

Regarding P2P lending platforms, the Bank of Italy clarified that such entities shall be authorised either as financial intermediaries, payment services institutions or electronic money institutions depending upon the specific characteristics of the provided services (among others, Bank of Italy Resolution of November 8, 2016, on the entities that collect savings different from the banks).

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

Regarding P2P lending platforms, entities receiving the money through the platform should carefully draft the related contractual terms. Indeed, the Ban

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