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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 most talked-about issue for the market is the proposal to enact the so-called “Anti-Usury Act”, the adoption of which will significantly affect the consumer lending market and, as a result, the market for related services. The bill is being criticized by industry players who take the position that the change will negatively affect their business.
The act would amend the maximum non-interest cost of consumer credit, introduce KNF (Komisja Nadzoru Finansowego) supervision of lending institutions, raise the minimum share capital threshold for such companies, change the creditworthiness assessment process, and prohibit the financing of lending activities through the issuance of bonds or other debt instruments.
Legal affairs
Obligations and requirements to provide loan-giving-, factoring-, brokerage-, finetrading, and ancillary services described above
Under the Consumer Credit Act (ustawa o kredycie konsumenckim), if a FinTech is not a bank or a cooperative savings and credit union, it must have the status of a loan institution if it wishes to enter into consumer loan agreements.
A consumer loan agreement is understood to be a loan agreement in an amount not exceeding PLN 255,550 (approx. EUR 54,040), which the creditor, within the scope of its activities, grants or promises to grant to the consumer. For example, loan agreements or Buy Now Pay Later services fall into this category. If the same services are offered to business entities rather than consumers, loan institution status is not required.
Loan institutions wishing to start legal activity should be registered as limited liability companies or joint stock companies with at least PLN 200,000 (approx. EUR 42,000) share capital. Loan institutions must be entered in the Register of Loan Institutions kept by the Financial Supervision Authority (Komisja Nadzoru Finansowego). Filing an application for entry costs PLN 600 (approx. EUR 125).
If, in its operations, the FinTech will offer services such as, for example, execution of payment transactions, money transfers, initiation of a payment transaction or access to account information (and others listed in the Payment Services Act (ustawa o uslugach platniczych)), it will be necessary to obtain a relevant license.
Factoring is not a regulated activity in Poland. Therefore, running such activity by FinTech is associated with low barriers to entry.
If P2P-services are addressed to consumers and not the entrepreneurs and such platform receives remuneration, it will need to be registered as a credit intermediary maintained by the Financial Supervision Authority. The cost of an application for entry of a credit intermediary into the register of credit intermediaries is PLN 600 (approx. EUR 125).
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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