Ministry of Finance assesses necessity to develop framework for peer-to-peer lending

The Ministry of Finance (MF) is assessing the necessity for developing the framework to ensure a possibility for various capital-raising initiatives including peer-to-peer lending.

Maija Straupmane, Deputy Director of the Ministry of Finance Communication Department, noted that peer-to-peer lending and crowdfunding is gaining popularity in Europe as a means for raising capital.

“This type of investment is well-developed in countries such as Germany, the United Kingdom, France, and Spain. With the establishment of a suitable platform, this type of capital-raising is also available for the funding of small and medium businesses in Latvia. Crowdfunding is mainly used for raising small and medium business investments from EUR 10,000 to 250,000. It involves attracting many investors to one project. Since such platforms are web-based, it allows any investor to very easily make an investment anywhere in the European Union (EU),” Straupmane stated, adding that the existence of such a platform significantly increases the fundraising possibilities for small and medium businesses.

The representative of the MF informed that there are discussions at the EU level concerning the planned operational objectives of a Capital Markets Union including an EU-level regulatory initiative with a view of harmonising conditions for capital-raising in various EU Member States by developing a regulatory framework to facilitate cross-border financing including various ways to raise capital from investors.

“Given the topicality of the issue both on a national level, as well as on the EU agenda, the MF is currently assessing the necessity for developing the regulatory framework to ensure possibilities for various capital-raising initiatives, which corresponds to the planned objectives of the Capital Markets Union,” Straupmane.


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