Loan Institution in Poland

Updated: 23.08.2024

Credits and loans in Poland are very popular, according to a current report by the Credit Information Bureau, only in the first quarter of 2024 loan companies granted a total of PLN 6.59 billion in liabilities.

Compared to the same period in 2023, there was an increase of as much as 113%. The loan amount for cash loans granted in this period alone amounted to PLN 4.43 billion, while the loan amounts for targeted loans and cards and loan limits amounted to PLN 1.89 billion and PLN 0.27 billion, respectively.

Additionally, grant loans significantly contributed to the financial landscape, further bolstering the overall loan portfolio. There is nothing to suggest that there will be a slowdown in investment in this financial institutions sector.

As of the beginning of 2024, the activities of loan institutions in the field of consumer credit are subject to supervision by the Komisja Nadzoru Finansowego (PFSA). Loan financial institutions are required to obtain registration in the Register of Credit Intermediaries and Loan Institutions. The register is maintained by the PFSA. The most relevant legal bases are contained in the Law on Consumer Credit and the Banking Law.

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What is a loan institution?

A loan institution under the Consumer Credit Act is a borrower other than:

• bank as a domestic bank, a foreign bank, a branch of a foreign bank, a credit institution or a branch of a credit institution within the meaning of the Banking Law
• Cooperative Savings and Credit Bank and the National Cooperative Savings and Credit Bank,
• an entity whose business is to provide consumer credit in the form of deferred payment of price or consideration for the purchase of goods and services offered by it,
• a national payment institution, a small payment institution, a national electronic money institution, an EU payment institution or an EU electronic money institution, within the meaning of the Payment Services Law, to the extent that it provides payment credit.

What are the requirements for entry to Loan Institutions Register in Poland?

I. Requirements of a corporate nature

Registration in the Loan Institution Register – i.e. Register of Credit Intermediaries and Loan financial Institutions – may be obtained by:

1. a corporation, i.e., an entity operating in the form of a joint-stock company or in the form of a limited liability company, in which a supervisory board has been established, and
2. a company with a share capital of PLN 1,000,000 covered only by a cash contribution. Importantly, the funds to cover this capital cannot come from a loan, credit, bond issue or from unsupported sources.

II. Criminal record requirements

A common requirement for both types of companies is that persons who are members of the company’s bodies or perform certain functions should not have a criminal record.

A member of the management board, supervisory board and registered company signatory may not be a person with a final conviction for a crime against the credibility of documents, property, economic turnover, money, and securities trading or a fiscal crime.

There are currently 534 loan institutions on the registry.

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How much does it cost to be listed as a Loan Institution?

The cost of an entry application process is 600 PLN (about 140 euros). On the other hand, a request to access modify an existing entry is 200 PLN (about 47 euros).

What obligations have been imposed on loan institutions?

I. Obligations under the Consumer Credit Act

The loan institution must inform the NFA (Polish Financial Supervision Authority – PFSA) quarterly and annually about:

• the number of consumer personal loans granted. This includes their term and currency structure, as well as delays in repayment,
• concluded consumer credit agreements,
• the number of existing customers who were granted consumer credit,
• total revenues generated from consumer credit activities. Along with a breakdown of revenue generated in connection with non-interest credit terms and costs,
• balance sheet (with an indication of the sources of financing for consumer credit activities),
• persons performing the functions of a member of the board of directors, supervisory board and proxy of the loan institution, including the fact that these persons meet the requirements set forth in the law in the field of non-criminal record (no final conviction for a crime against the credibility of documents, property, economic turnover, money, and securities trading or a fiscal crime).

II. Obligations under the law on counter-terrorism and anti-money laundering

As a result of legislative changes, loan institutions have also been classified as obligated institutions, resulting in obligations regarding:

• drafting an Anti Money Laundry (AML) procedure,
• AML training of employees,
• implementation of Know Your Customer (KYC) procedures,
• obligation to report to the Inspector General of Financial Information.

How does KNF supervise Loan Institutions in Poland?

The PFSA may require a loan institution to provide information, documents, or other necessary data, as well as issue binding recommendations to the loan institution regarding the legality of granting consumer credit.

Failure to comply with obligations imposed by the PFSA can lead to numerous sanctions.

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What penalties can Loan Institutions suffer?

The catalog of penalties is divided into two groups.

The first of these concerns financial penalties. An administrative fine of up to PLN 150,000 can be imposed on a member of the board of directors of a loan institution. On the other hand, an administrative fine of up to PLN 15,000,000 can be imposed on a loan institution.

Interestingly, in the case of an entrepreneur based outside of Poland, but operating in Poland, if the PFSA finds that it violates the provisions of the Act or conducts this activity in violation of the conditions set forth in the Act, the PFSA may:

• call for compliance with the Polish law and set a deadline for the removal of identified irregularities or even
• prohibit the entity from conducting consumer credit activities in Poland.

The second group of penalties focuses on preventing the loan institution from continuing to operate. In this situation, the PFSA can:

• request the competent authority of the loan institution to dismiss a member of the board of directors of the loan institution. At the same time, the PFSA may suspend a member of the loan institution’s board of directors until the loan institution decides to dismiss the board member in question,
• remove the loan institution from the register.

The reason for the imposition of all the listed sanctions may be:

• failure to provide information requested by the PFSA or to perform this duty incorrectly,
• actions in violation of the provisions of the Consumer Credit Act.

Financial institutions are still developing their services

A consequence of the development of the loan sector is the increasing number of entrepreneurs registering as loan institutions. The legal basis for operating on the Polish market is an entry in the Register of Credit Intermediaries and Loan Institutions.

The entry is associated with a number of orders regarding the company’s capital and the composition of the board of directors, as well as AML requirements. Their observance is supervised by the Polish Financial Supervision Authority (PFSA), which applies a number of sanctions that can even lead to deletion of the company from the register, which prevents it from further legal activity.

If you have a question about setting up, running a loan institution or have entered into a dispute by the PFSA, then contact our specialists at e-mail [email protected]! 

Cash loan and bank loans – FAQ about loan institutions in Poland