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Finland’s Alt-Lending Bill Becomes Law


Finland’s government has passed proposed legislation targeting the crowdfunding and alternative finance industry, reports on Wednesday (April 13) said.

The Finnish Crowdfunding Act was designed to clarify the role of regulators as alternative lending fills the gap left by traditional banks unwilling to lend to SMEs. The legislation also tackles investor protection, reports said.

“Crowdfunding will improve access to financing, particularly for SMEs and startups,” said Minister of Finance Alexander Stubb in a statement. “Through this, it will be possible for them to boost their growth opportunities, investment options, commercialization of innovations and thereby, hopefully, employment.”

Reacting to the passage of the bill, Lasse Mäkelä, CEO of local crowdfunding platform Invesdor, told reporters that the initiative is separate from broader EU objectives in the alternative finance space.

“SME finance is very high on the EU Commission and the Capital Markets Union agenda, but it is highly unlikely that there will be harmonized EU legislation on crowdfunding in the near future,” the CEO said, adding that similar legislation has already materialized across Italy, France, the U.K., Germany, Spain, Austria and Portugal.

“Major EU Member States with very different national legislation on crowdfunding provide a difficult starting point for EU negotiations,” Mäkelä added.

Invesdor is not one of the crowdfunding platforms that will be impacted by the new law, reports noted, because it is licensed with the Markets in Financial Instruments Directive (MiFID).

Investment-based crowdfunding is currently under the jurisdiction of the Finnish Financial Supervisory Authority and the Investment Services Act, reports said.

The law, which will come into effect on July 1, will not apply to peer-to-peer loan mediation operations, reports noted. Instead, it will only impact investment-based and loan-based crowdfunding platforms that finance businesses.


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