Private credit intermediation: peer-to-peer loans and the legal side

“Peer-to-peer” credit is the English term for a new type of lending business, which is also gaining prominence in Germany. In principle, this is the private money lending: private individuals lend money to other private individuals. Against corresponding interest, of course. In the times of Web 2.0, of course, this topic pushes the Internet and manifested here in so-called “social lending” platforms such as Prosper or the German page smava . Here, borrowers and lenders are brought together, similar to eBay buyers and sellers.

The idea behind the concept or the advantage that the participants have here describes smava as follows:

“The credit marketplace allows investors and borrowers to share the spread between deposit and lending rates common in banking. This benefits both the investor and the borrower. “

Interesting in this context is the question on which legal basis these credit transactions are based. Can I – as a private citizen – actually just borrow money and collect interest? After all, banking transactions are actually subject to authorization ! And how are platforms like smava involved?

The Federal Financial Supervisory Authority (BaFin) has devoted this issue to its 05/07 issue of its regular BaFinJournal (available for download here ).

Basically, the mediation platforms are not under the supervision

Basically, the mediation platforms are not under the supervision of BaFin:

Accordingly, “credit brokerage platforms are generally not under the supervision of BaFin. However, BaFin checks on a case-by-case basis whether the operators or the users of the credit brokerage platform justify their obligation to have a banking supervisory license. “

Indeed:

“Depending on the specific contractual arrangement of the individual business project, both the users of the credit brokerage platform and the operators of the platform can conduct their own banking transactions subject to authorization.”

“Pursuant to section 32 (1) sentence 1 KWG, these transactions require a BaFin authorization if they are operated commercially or to an extent that requires a commercial operation.

The scope of business is irrelevant if business is to be commercialized. This is the case if the business is invested for a certain period of time and the operator pursues it with the intention to make a profit. This can already be assumed when concluding a single transaction if the intention is to repeat it, even if it is irregular. “

In concrete terms, even if a person only offers credit once via a social lending platform, he runs the risk that BaFin will regard this as unlawful, commercial lending without permission. At least until now, this new kind of lending business in Germany has not had to face intensive legal scrutiny – the further development remains to be seen.

Stiftung Warentest: Private Loans - Smava Security