 | While much is known on online investing in Western Europe, less information is available on how the sector is developing in the Eastern part of the continent. Therefore we thought to take a closer look to the situation in the Baltic States, namely Estonia, Latvia and Lithuania. |
Although the market has not the same dimension and diffusion of some of its western counterparts, like the UK or France, it still has an interesting potential, that some early stage platforms are already exploiting.
Lithuanian authorities have recently reacted to the growing peer-to-peer lending sector, creating a legal framework that it is meant to enter into effect from February 2016. The regulation associates online lending portals to consumer credit providers and therefore requires they register with the Bank of Lithuania and comply with same requirements, such as advertising limitations, pre-contractual information requirements and creditworthiness assessment rules. In addition to these, it also demands that operating P2P platforms are endowed with an authorised capital of at least €40,000, prepare and approve a business continuity plan setting measures and procedures to ensure that activities are carried out continuously and without interruption and disclose specific information about itself and the lending process. On the other side, the new rules forbids legal entities to lend through online portals, limiting thus this possibility to individuals only, who, however, cannot invest more than €500 per offering and no more than €5,000 per year.
Close-by Estonia, instead, has no specific regulation for crowdfunding, but the Government has launched, last May, an ambitious e-residency program that could turn useful not only to local online investing platforms, but also to foreign ones. In particular, the program provides a very high authentication level, with e-residency assigned only by Estonian embassies around the world, upon presentation of a valid passport and after the government has conducted thorough background checks on the applicants. This could potentially benefit online investing platforms, by helping them save time and efforts on KYC processes, as projects owners would be already checked by the Estonian Government.
Last but not least, Latvia has not adopted any specific framework for online investing, but local actors have formed a P2P association to make sure possible future policies goes into the desired direction.
We still don’t know how these recent measures and changes adopted by the Baltic States will impact the local growing online investing sector, but will keep on the lookout for any interesting development.
References
Tomas Kontautas, Augustas Klezys, Lina Ragainyte and Arturas Asakavicius (2015).Changes in consumer lending. Lexology.com
Kleverlaan, R. (2015). How the Tiny Estonian Government Can Give a Boost to the Global Crowdfunding Industry with their e-Residency Project. Crowdfundinsider.com
Crowdfunding Association of Latvia established. Baltic-course.com (2015)
Lithuanian authorities have recently reacted to the growing peer-to-peer lending sector, creating a legal framework that it is meant to enter into effect from February 2016. The regulation associates online lending portals to consumer credit providers and therefore requires they register with the Bank of Lithuania and comply with same requirements, such as advertising limitations, pre-contractual information requirements and creditworthiness assessment rules. In addition to these, it also demands that operating P2P platforms are endowed with an authorised capital of at least €40,000, prepare and approve a business continuity plan setting measures and procedures to ensure that activities are carried out continuously and without interruption and disclose specific information about itself and the lending process. On the other side, the new rules forbids legal entities to lend through online portals, limiting thus this possibility to individuals only, who, however, cannot invest more than €500 per offering and no more than €5,000 per year.
Close-by Estonia, instead, has no specific regulation for crowdfunding, but the Government has launched, last May, an ambitious e-residency program that could turn useful not only to local online investing platforms, but also to foreign ones. In particular, the program provides a very high authentication level, with e-residency assigned only by Estonian embassies around the world, upon presentation of a valid passport and after the government has conducted thorough background checks on the applicants. This could potentially benefit online investing platforms, by helping them save time and efforts on KYC processes, as projects owners would be already checked by the Estonian Government.
Last but not least, Latvia has not adopted any specific framework for online investing, but local actors have formed a P2P association to make sure possible future policies goes into the desired direction.
We still don’t know how these recent measures and changes adopted by the Baltic States will impact the local growing online investing sector, but will keep on the lookout for any interesting development.
References
Tomas Kontautas, Augustas Klezys, Lina Ragainyte and Arturas Asakavicius (2015).Changes in consumer lending. Lexology.com
Kleverlaan, R. (2015). How the Tiny Estonian Government Can Give a Boost to the Global Crowdfunding Industry with their e-Residency Project. Crowdfundinsider.com
Crowdfunding Association of Latvia established. Baltic-course.com (2015)
 | About the author - Irene Tordera Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives. During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem and she works also for the European Crowdfunding Network. |
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