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Deal 5: FinBee CFA and CEO Darius Noreika on Electronic Money Institution License

Lithuania
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On June 22, 2021, CEE Legal Matters reported that Motieka & Audzevicius had advised Elektroniniu Pinigu Bite on obtaining an electronic money institution license. According to the firm, Elektroniniu Pinigu Bite “serves related companies – mutual lending and crowdfunding platforms FinBee, FinBee for Business, and their customers.” CEE In-House Matters spoke with Darius Noreika, CFA and CEO at Finbee, to learn more about the matter.

CEEIHM: Tell us a bit about Finbee/Elektroniniu Pinigu Bite.

Darius: Finbee is a leading P2P lending platform for consumers and SMEs in Lithuania. We have over 20 thousand registered lenders. To this date we have funded 52m EUR of loans that generated nearly 8m EUR of interest for our lenders. According to Lithuanian P2P lending regulation platform operator cannot provide payment services, unless it has EMI licence.

Most Lithuanian platforms are working with external payment service providers but this model is not convenient for customers because in order to start investing a customer needs two accounts - one at P2P lending platform and another at payment services provider.That means that a customer must go through onboarding processes twice (identification, client questionnaire, other AML related procedures). At Finbee we are extremely focused on our customer experience therefore we wanted to have the best possible onboarding process in the market. To achieve this we have established Elektroniniu pinigu bite - Finbee group company that provides payment services for Finbee users. The company is fully integrated in Finbee P2P lending platform, therefore our customer does not need any additional registrations.

CEEIHM: What brought up the need for this license now, given that the company is already a few years old?

Darius: Elektroniniu pinigu bite was established in March  2017. In September 2017 the company received limited EMI licence that enabled us to provide payment services in Lithuania only and with limited operation amounts. The company started providing payment services to Finbee users in September 2019 and in 2020 we exceeded operation amounts limits for limited EMI, therefore we had to upgrade our licence. Motieka & Audzevicius firm helped us in both licensing processes - in 2017 and in 2020-2021.

CEEIHM: What was the process like? Were there any unexpected hurdles along the way?

Darius: The process went pretty well without significant unexpected hurdles. But it took longer than expected due to slow response from the regulator. We expected to finish the process in 6 months, but it tool 9 months to receive EMI licence.

CEEIHM: What was Motieka & Audzevicius' mandate specifically? What areas were they involved in advising on?

Darius: Our internal team has extensive knowledge about our business model and daily operations, but we lack experience in licensing processes. Motieka & Audzevicius has extensive experience in licensing processes. So our internal team worked on the content of application documents (internal policies, business plan, etc.) and Motieka & Audzevicius firm advised us on what documents are required, how they should be prepared, reviewed all application documents before providing them to the regulator and advised what should be changed or updated. The firm also helped in preparation of more general documents such as shareholder and general manager questionnaires, other documents that does not differ much for different companies.

CEEIHM: And why did you opt to turn to them specifically for legal assistance on this matter?

Darius: Motieka & Audzevicius has a dedicated Fintech team that is experienced in the field and is in a good relations with the regulator. Dedicated team of highly skilled lawyers enables the firm to provide high quality services. Good relations with the regulator helps to achieve informal and efficient communication when necessary. I prefer working with smaller more specialised firms over largest legal firms that provide wide range of services. Based on my experience specialised firms tend to outperform large firms when required services are pretty specific. With Motieka & Audzevicius we had a great experience in previous licensing process in 2017, so it was easy to decide to work with the firm on licence upgrade.

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