Consumer Credit and Buy Now Pay Later (BNPL) Licensing in the EU

Consumer Credit and service providers offer consumer loans to private individuals for their personal (consumer) needs. Financing made from own capital of Consumer Credit Provider. Third party is not usually engaged in the financing process. Peer to Peer Lending Platforms provide consumer loans from the third party funds being intermediaries between the lender and consumer. Both offer fast and easy financing as an alternative to complicated bank financing.    

Fast and easy licensing, friendly regulation

The latest amendments to the Lithuanian Consumer Credit regulation allow fast and easy licensing of Consumer Credit Providers and P2P platforms. Usually, it takes a bit more than 1 month to be included in the Public List of Consumer Credit Providers or Peer to Peer (P2P) platform operators. The Bank of Lithuania (Regulator) is currently considered to be one of the most business-oriented and progressive regulators in EU/EEA.

Passporting of Consumer Credit and P2P license in European Union (EU/EEA area)

Lithuanian Consumer Credit and Peer to Peer (P2P) operator licenses issued by the Bank of Lithuania are considered as Lithuanian national licenses issued by the financial regulator of the EU member state. Passporting of Consumer Credit or Peer to Peer services within the EU/EEA can be achieved by combining Consumer credit/P2P license with the Electronic Money Institution, Payment Institution or another passportable license.

The list of documentation to be provided for Consumer Credit licensing

To be included in the Public List of Consumer Credit or P2P Platform Operators, the following documentation need to be provided:

• Application to be included in the Public List of Consumer Credit Providers or P2P Platform Operators.
• Information on the public register where the supervisory authority can verify basic personal data and information on the shareholders and managers by proving their compliance with the requirements.
• Rules for assessing the creditworthiness of borrowers.
• Information on registers and information systems referred to for the purposes of assessing the creditworthiness of borrowers.
• Business continuity plan (business plan).
• List of consumer credit intermediaries acting on behalf of the consumer credit provider, if any.

Business Continuity Plan and Rules for Assessing the Creditworthiness of Borrowers are the most complex documentation to be prepared during the licensing procedure. The plan should provide measures and procedures ensuring that Consumer Credit Providers activities are carried out continuously, without interruption, by ensuring a smooth administration of the Consumer Credit contracts and continuing fulfillment of the contractual obligations in the cases of unforeseen circumstances. Being the most experienced financial licensing advisor, ECOVIS ProventusLaw assists in the preparation of the Business Continuity Plan, other licensing documentation, accounting, reporting, audit, and setting up all Consumer Credit business.

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