The Finnish Market for Peer-to-Peer Lending
According to data from the latest report by Cambridge Centre for Alternative Finance (CCAF) on alternative finance and crowdfunding in Europe, Finland had a total funding volume of €196.76 million in 2017, which places the country as the sixth largest country in the region after the UK, France, Germany, the Netherlands and Italy. Out of the total Finnish alternative finance funding, volume €127.0 million or 64.5% came from P2P lending (in Finland also often known as crowdlending).
Below, you will find a complete list of all crowdlending platforms operating in Finland, followed by a presentation of the latest data on the Finnish market for P2P lending.
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Best Crowdlending Platforms in Finland
Here, you will find a list of the top peer-to-peer lending platforms in Finland. Under each platform, you will find a brief description of the platform and the type of peer-to-peer lending available for investing on the platform. The list is sorted alphabetically, but to promote platforms contributing to transparency in the market, we have placed the platforms sharing data about their funding volume and other relevant statistics on the top. If you see a platform missing, please feel free to submit the platform by using submit formula located in the sidebar of this page.
Fellow Finance facilitates crowdfunding in the area of SME business lending, consumer lending and invoice financing at a minimum investment of €25 in consumer loans and €100 in business loans/invoices. The platform offers unsecured consumer financing to Finnish residents as well as business loans and invoice financing for Finnish companies. Fellow Finance was founded in 2013 by Harri Tilev, Jouni Hintikka and Teemu Nyholm as a Finnish company. The office and company is located in Helsinki, Finland but also offers its services in Germany, Poland, Sweden and Denmark. Loans are offered in Euro(EUR), Swedish Krona(SEK), Polish Zloty(PLN) and Danish Krone(DKK).
Any company or person of at least 18 years old with a EU bank account can invest on Fellow Finance.
Any company registered in Finland or person from 20–75 years old that is permanently residing in Finland with a Finnish bank account and online banking ID can apply for a loan on Fellow Finance.
Fixura facilitates crowdfunding in the area of peer-to-peer consumer lending to Finnish residents at a minimum investment of €1.000. The platform offers unsecured consumer financing for any use the borrower sees fit such as home renovations, vacation or even new wheels for the car. Fixura was founded in 2009 by Simon Sandvik, Jeanette Samuelsson and Marcus Wikars as a Finnish company. The office and company is located in Vaasa, Finland and exclusively offers financing to Finnish residents. All loans are in Euro(EUR).
Currently Fixura is not accepting new investors as they are building a new and improved service that should be released in the beginning of 2020.
Any person between the age of 21 to 68, living permanently in Finland with a Finnish bank account, regular income and no credit defaults can apply for a loan on Fixura.
Lainaaja facilitates crowdfunding in the area of consumer lending to people that has their residency in Finland at a minimum investment of €50. The platform offers financing for the purchase of different purposes such as vehicles, health care, housing, renovation, accommodation, and refinancing among other personal projects. Lainaaja was founded in 2010 by Henri Norio and Tuomas Talola as a Finnish company. The office and company is located in Turku, Finland and exclusively offers financing to Finnish citizens. All loans are in Euro(EUR).
Vauraus facilitates crowdfunding in the area of SME business lending to Finnish companies at a minimum investment of €100. The platform offers financing to businesses and entrepreneurs with growth projects, new acquisitions, working capital, and development among others. Vauraus was founded in 2011 by Jaako Tannerkoski and Olli Tannerkoski as a Finnish company. The main office and company is located in Helsinki, Finland and exclusively offers financing to Finnish SME companies and entrepreneurs. All loans are in Euro(EUR).
Crowdfunding and Alternative Finance in Finland
For a current view of the European market for peer-to-peer lending and equity crowdfunding, you can visit our data-section for an overview of all platforms denominated in Euros. However, another valuable source of data to visit for a view on the historical development of alternative finance and crowdfunding in Finland is the Cambridge Centre for Alternative Finance (CCAF), who published their first report on the European market for alternative finance in 2015. The latest and fourth report was published in 2019 was called “Shifting Paradigms” and looks at 45 European countries and 269 platforms. The report primarily covers the four main types of crowdfunding: lending-based crowdfunding, equity-based crowdfunding, reward-based crowdfunding and donation-based crowdfunding. Because the report uses survey data the latest data available is from 2017.
The total Finnish market for alternative finance in 2017 was €196.8 million up from €142.2 million in 2016, which corresponds to a growth rate of 38.4%. In 2016, the market grew an impressive 122.5%. In the figure below, you can see the market development in Finnish crowdfunding and alternative finance from 2015-2017.
Finland accounted for 5.8% of the crowdfunding market in continental Europe in 2017. In comparison to the Finnish funding volume €196.8 million, the countries with higher funding volumes in continental Europe were France with €661.4 million, Germany with €595.5 million, the Netherlands with €279.9 million and Italy with €240.7 million. In a worldwide perspective, Finland is placed as number 15 in the market for alternative finance and crowdfunding.
Statistics About Crowdlending in Finland
The total alternative finance volume in Finland in 2017 was split between eight different business but for our purpose, we will focus on the numbers reported on P2P consumer lending and P2P business lending, which are the two peer-to-peer lending business models identified by CCAF in the Finnish market. In total, crowdlending accounted for 64.5% of the total alternative finance funding volume in Finland. Here, €101.5 million came from P2P consumer lending and only €25.5 million came from P2P business lending. In total peer-to-peer lending grew by 36.8% in 2017, going from €109.5 million in 2016 to €127.0 million in 2017. However, it is worth noting that P2P business lending actually fell by 46.3% in 2017 going from €47.5 million in 2016 to €25.5 million in 2017, so the total growth in crowdlending in Finland can be attributed to growth in P2P consumer lending.
Below, you will find a figure showing how peer-to-peer lending has developed in Finland from 2015-2017.
To put the Finnish P2P lending funding volume into perspective, the two largest players on the peer-to-peer lending market in continental Europe, France and Germany, had a funding volume from P2P lending of €410.7 million and €396.7 million, respectively. However, if we look at the whole European region and thus includes the United Kingdom, who had a total peer-to-peer funding volume of £4,660 million in 2017, there should be plenty of room left for growth in Finland.
Taxation on Peer-to-Peer Lending in Finland
In Finland, you pay capital gains tax on crowdlending and interest income in general according to the current tax rate. If you have credit loses, these can be deducted for tax purposes. If you are interested in learning more about tax and crowdlending in Finland, please visit the Finnish Tax Authorities here.
P2P Lending Regulation in Finland
Since there is still a lack of common rules for crowdfunding in the European Union, regulation of peer-to-peer in Finland is based on national legislation though this might change in the foreseeable future as the European Commission in March 2018 presented a proposal for a regulative framework on crowd and P2P finance as part of their Fintech Action Plan.
Below, you will find an overview of some of the most important aspects of the regulatory framework for lending-based crowdfunding platforms operating in Finland. These highlights can also be found in a paper published by the OECD Economics Department on Regulatory framework for the loan-based crowdfunding platforms from 16 November 2018.
- Legal status for lending-based crowdfunding platforms: Crowdfunding Act (734/2016) covers both lending-based crowdfunding platforms and investment-based crowdfunding platforms.
- Date of the legislation: 25.8.2016
- Name of the supervisor: Financial Supervisory Authority
- Type of loan/debt security: The bespoken regime covers business loans and bonds. It also covers equity
- Minimum capital requirements: EUR 50,000 in equity or professional liability insurance policy, bank guarantee or other corresponding collateral which the Financial Supervisory Authority deems to be sufficient.
- Automatic lending allowed? Not regulated.
- Secondary market allowed?
- Clients’ money: No unauthorized money handling is allowed. The platform must rely on banking services (licensed) or payment institutions or they should apply for registration as a payment institution.
- Provision fund allowed?
- Max size of loan: No limit.
- Max invested amount: No limit.
- Scoring model verified by the regulator: No.
- Collateral allowed: No.
- Access to credit information sharing scheme allowed: No.
- Disclosure and risk warnings: According to Section 10 of the Crowdfunding Act, intermediaries must comply with:
- According to the provisions of section 5 of the Act on Investment Services on the duty of disclosure; the investment firm shall provide to a retail client sufficient information on: 1) the investment firm and the service provided by it; 2) the nature of the types of financial instruments and other financial products subject to the service and the risks particular thereto; 3) investment strategies, if suggested, and the risks involved therein; 4) the places where orders will be executed; 5) the depositing of client assets and the risks particular thereto especially in situations where the client assets are deposited with a third party or in a securities account; 6) the expenses and fees relating to the service.
- In addition, according to Section 11 of the Crowdfunding Act Duty of disclosure: (1) No false or misleading information may be given in the marketing of crowdfunding. (2) For the purpose of a considered assessment of a crowdfunding recipient and the favourability of an offer, the crowdfunding recipient must disclose true and sufficient information about factors that are likely to materially influence a company’s value or its repayment ability, before starting to acquire funds. Crowdfunding intermediaries must take care to ensure that crowdfunding recipients meet the obligation laid down in this subsection. (3) Crowdfunding recipients and crowdfunding intermediaries have an obligation to release information without delay about material changes that occur in their economic circumstances and about other factors that affect the fulfilment of their obligations. (4) Notwithstanding the provisions of Chapter 4, section 3 of the Securities Markets Act, crowdfunding recipients do not need to publish a prospectus if the securities are offered in Finland and their combined consideration over 12 months is less than EUR 5,000,000.
- Do lenders have to pass a financial literacy test?
- Business continuity requirements:
- Can platforms invest in loans/securities that they facilitate?
Authorisation of platforms and professional requirements for applicants: The registration process (for loan-based crowdfunding and investment-based crowdfunding with other securities than financial instruments) is stated in sections 3 to 7 of the Crowdfunding Act.