LATVIA-HEADQUARTERED peer-to-peer lender Mintos has been refused regulatory approval in the UK, three years after its initial application.
The Financial Conduct Authority (FCA) said that it was not satisfied that the platform had the appropriate resources to implement its proposed business model in the UK.
The FCA also said that Mintos had “not provided sufficient evidence to demonstrate that it will adequately capitalise its business” and had not shown that its head office would be based in the UK, in line with regulatory requirements.
Mintos has offices in Spain, Germany, Poland, Latvia and the Czech Republic.
The lender first applied for UK authorisation in March 2016, before amending a number of its policies in line with FCA guidance.
In March 2018, Mintos changed its application to include permission to operate an electronic system in relation to lending. This would have formed the basis of its P2P lending platform, whereby borrowers and investors could enter into unsecured loan transactions, with a focus on short-term credit solutions.
This model is similar to the Mintos Latvia platform, which is also currently unregulated.
However, in the course of assessing the firm’s UK application, the FCA concluded that Mintos was not “sufficiently ready, willing and organised to undertake its proposed business compliantly.”
“The policies and procedures that [Mintos] has provided to the Authority to date fail to set out in sufficient detail the practical steps and approaches that [Mintos] will need to take to implement its proposed business model compliantly,” said the FCA.
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“Three of the key areas where the firm’s policies and procedures are inadequate relate to creditworthiness assessments, arrears handling and winding down the firm’s business.”
This article featured in the May issue of Peer2Peer Finance News, now available to read online.