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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
There are no reservations. On the contrary, it is a fast-growing market.
Legal affairs
Obligations and requirements to provide loan-giving-, factoring-, brokerage-, finetrading, and ancillary services described above
As for Fintech companies that provide loan services, Spanish law does not generally impose any formal or material requirements for granting loans. In plain words, loans are governed by the general commercial law. An exception to this is that for consumer loans the agreement has to be drawn up on paper and they use the denomination of financial credit establishments (“Establecimientos Financieros de Credito”), specialized in the granting of credits and loans in a specific field such as consumer credit, mortgage credit, credit cards, guarantees, leasing (leasing with purchase option), factoring (assignment of a credit portfolio).
On the one hand, for loans of considerable amount, the market practice is to grant a loan in writing before a Spanish notary so that the lenders (FinTech companies) can enforce the loan through special foreclosure procedures for notarized agreements. On the other hand, for loans of small amount, an agreement between the parties is enough. P2P lending is considered as a crowdlending activity under Spanish law and is regulated in Law 5/2015, of April 27, on the Promotion of Business Financing ("LFFE").
As for FinTech companies that provide brokerage, finetrading and ancillary services, as long as they are not conducted with funds collected from the general public (i.e. banking activity), there would be no need for the FinTech to obtain a bank license.
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
This is a non-regulated area (generally it can be performed without a licence) and this facilitates that it is a growing business, specifically in consumer credit.
Economic conditions
Market size for loan-giving-, factoring-, brokerage-, finetrading- and ancillary services and biggest companies in this business area
It is a very fast-growing market. However, there is no recent public data available.
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