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Report: Czech regulator issues first licenses for nonbanking loan providers

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Report: Czech regulator issues first licenses for nonbanking loan providers

KBC Group NV unit CSOB Leasing a.s., Home Credit a.s., ŠkoFIN s.r.o. and EC Financial Services are the first nonbanking loan providers that received licenses from Ceská národní banka, news agency CTK reported Dec. 1.

All nonbanking firms wishing to offer loans or act as intermediaries on the Czech loan market had to apply for a license with the Czech central bank by the beginning of March, with license requests filed by 112 entities. The Czech regulator has until May 31, 2018, to review the applications and issue relevant licenses. The conditions to receive a license include having capital of at least 20 million Czech koruny, the ability to verify the origin of funding used for loans, and credible management.

The licensing requirement for nonbanking loan providers and intermediaries was introduced by the country's consumer lending legislation and is aimed at cleaning up this market segment, the newswire said, adding that there were around 55,000 companies of this type on the market before the legislation was introduced in 2016.

As of Dec. 1, US$1 was equivalent to 21.52 Czech koruny.