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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
Provision of credit and factoring services are regulated activities in Serbia.
As a business activity, credit may be provided in Serbia 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 as a regulated activity. However, frequent 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 is regulated pursuant to the separate Law on Factoring, which lists the conditions under which these services can be provided in Serbia. Factoring companies engaged in local factoring must be licensed by the Ministry of Finance. Foreign factoring companies may be engaged in international factoring in Serbia, without obtaining of the local license, if certain conditions are met.
The main means of obtaining financing by the Serbian companies remain obtaining credit from the banks. As aforementioned, companies also occasionally use financing from their shareholders or connected companies. Factoring services seem to be increasingly used by the Serbian companies as a means of unlocking liquidity. In this regard, a visible trend on the market is the remote conclusion of factoring agreements through the online platform.
Loan brokering and finetrading are not regulated. Also, they are not present on the market.
Legal affairs
Obligations and requirements to provide loan-giving-, factoring-, brokerage-, finetrading, and ancillary services described above
Provision of loans and factoring services are regulated in Serbia, whereas loan brokering and finetrading are not recognised.
Under the Law on Banks, only an entity duly organized and licensed as a bank may provide credit in Serbia.
Besides banks, there is a possibility under the PS Law for a payment institution/e-money institution to grant a loan to a payment service user in connection with the payment services it regularly provides, but only if the following conditions are met: (i) a loan has been granted exclusively for the execution of a payment transaction; (ii) the loan repayment period does not exceed 12 months; (iii) a loan has not been granted from the funds of payment service users received by a payment institution for the execution of payment transactions of these users; (iv) own funds of a payment institution are at all times appropriate to the total amount of the loans granted. That type of loans also relate to an authorised overdraft facility and credit cards issuance.
Minimum capital requirements are EUR 10 million for ? bank, EUR 20,000 to EUR 125,000 for a payment institution (depending on the type of payment services which will be covered by the license), and EUR 350,000 for electronic money institution.
Provision of both domestic and international factoring services is regulated pur