Is Peer to Peer possible in Romania?
This small article is a small answer for all the questions that I received in the last few years and still getting it a lot about “What is going on with peer to peer in Romania?”.”You have a large country, business there is booming!”
The short answer that I gave a lot was “Nothing, it simply does not exist!” of course all my European contacts and people that I usually meet at Fintech Conferences and Events where shocked or just wandered if I was telling the truth or just making fun of them for not knowing.
But…Unfortunately for Romania I was telling the truth, there is no peer to peer, crowdfunding, etc system in Romania.We have only Banks and Non Banking Institutions that do lending.And this is done only with a license from the National Bank of Romania.All the reasons (and there are some) are legal reasons for not doing it.
Just a few:
1.To issue loans a company needs a license, in order to obtain a license you need certain capital requirements and so on, in a nutshell only Banks and NonBanking Institutions can do it(more than occasionally I mean)
2.If you are a NonBanking Institution you are not allowed to take deposits or amounts of money from public(so no investors for you, that means peer is out)
3.If as a private individual you want to lend money (and not be criminally charged) you need to have a maximum interest rate on the same level as the Central Bank (around 2-4% per year) so not really worth it.
With this being said, you can do “to peer” but no “peer to peer” (this means only lending not the whole system) for Romania any time soon…And I say this because at this time March 2018 there is not even one piece of legislation regarding the subject in discussion, least in process.So Romania unfortunately can not reach the full potential of this market and Romanian citizens are investing in other countries that allow this system and even support it by giving them a legal framework to work with.Also another thing to consider is that Romanians have close to 60 Bln Euro in bank deposits, and except for the Stock Market no real other place to make an investment.Maybe in the future Romanian political figures will learn from other countries and adapt…Maybe…Until then as the map in the picture shows , we are not there but we have a lot of potential.