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
As a business activity, credits may be provided in Montenegro only by the local banks and to a certain extent by local payment institution/e-money institutions. In practice, occasional granting of inter-company loans is common, typically as intragroup or shareholder loans and is not considered a regulated activity. However, frequent lending or lending to unrelated entities with a view to gain profit, would be exposed to the risk of the licensing requirement.
Provision of both domestic and international factoring services, as well as finetrading (the term used in Montenegrin legislation is ‘reversed factoring’) is regulated pursuant to the separate Law on Financial Leasing, Factoring, Receivables Purchase, Microcredit and Guarantees, which lists the conditions under which these services can be provided in Montenegro. Factoring companies engaged in local factoring must be licensed by the Central Bank of Montenegro. Foreign factoring companies may be engaged in international factoring in Serbia, without obtaining of the local license, if certain conditions are met.
Loan brokering is not regulated and not present on the market.
Legal affairs
Obligations and requirements to provide loan-giving-, factoring-, brokerage-, finetrading, and ancillary services described above
Loans may be granted only by banks and other credit institutions, as defined by the Law on Financial Institutions.
Factoring and Reverse factoring services may be provided by the banks and by the factoring institutions licenced by the Central Bank of Montenegro. The licence is issued to the companies incorporated in Montenegro and that have provision of factoring services (and auxiliary services therein) as their only registered business activity.
Loan brokering is not recognised under Montenegrin law.
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
Please see the answer provided in section a. vi.
Additional comments regarding the economic situation for loan-giving-, factoring-, brokerage-, finetrading- and ancillary services or what FinTech’s must be aware of in this business area
N/A