FRANCE Law and Practice Contributed by: Sylvain Clavé and Germain Chaux, Clavé Avocat
ment service providers to ensure they obtain the best possible results when executing orders for their clients and implement a dedicated policy. 4. Online Lenders 4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities As of 2026, the French crowdlending market is gov - erned (almost) entirely by the European Crowdfund - ing Service Provider (ECSP) Regulation, which has superseded the domestic regime introduced in 2014. Whereas the original French framework created a narrow exemption from the banking monopoly with strict quantitative caps – such as a EUR2,000 limit per lender and a EUR1 million ceiling per project – the current harmonised European regime offers a more streamlined environment for business financing. The applicable regulatory framework is structured as follows. • Platforms must be authorised as crowdfunding service providers (CSPs) by the AMF. Where their business model includes the facilitation of loans, the ACPR must also give its prior assent. • Proportionate regulation: unlike traditional lenders, which must be licensed as full credit institutions, crowdlending platforms are subject to a regula - tory framework calibrated to their role as financial intermediaries. • The former French “crowdfunding intermediary” (IFP) status is now maintained solely for platforms whose activities are strictly confined to dona - tions and interest-free loans, which fall outside the scope of the EU ECSP Regulation. 4.2 Underwriting Processes In the French crowdlending market, underwriting is primarily driven by each platform’s internal credit poli - cies rather than by prescriptive rules on how to assess credit risk. Platforms generally combine borrower onboarding (KYC/AML, identity and legal checks, sec - tor exclusions) with financial analysis of the borrower and the project (financial statements, cash flow fore - casts, leverage, collateral/guarantees where relevant),
often supported by proprietary scoring models used to grade risk and set pricing and eligibility thresholds. For SME and corporate borrowers, these models are increasingly enriched with sector-specific stress sce - narios, behavioural data (payment incidents, covenant breaches) and forward-looking indicators (order book, macroeconomic sensitivity). Regulation does not impose a standardised underwrit - ing methodology but indirectly shapes these process - es through stringent information and investor-protec - tion requirements under Regulation (EU) 2020/1503. Crowdfunding service providers must produce a key investment information sheet for each offer, ensure that disclosures are fair, clear and not misleading, and implement procedures to assess whether inves - tors can bear the risks associated with the proposed investments. In addition, CSPs are required to per - form project due diligence proportionate to the nature, scale and complexity of the transaction, to docu - ment their credit decisions, and to implement robust internal controls over their scoring models (periodic back-testing, model validation and governance). They must monitor portfolio performance (defaults, restruc - turings, recovery rates) and adjust their underwriting standards accordingly, as these metrics are scruti - nised by regulators. 4.3 Sources of Funds for Fiat Currency Loans The primary source of funds for fintech-led loans was individual retail investors. Today, this is strictly governed by Regulation (EU) 2020/1503, which har - monises the rules for crowdfunding service providers across the EU. The key distinction lies in the classifi - cation of sophisticated and unsophisticated investors. Unsophisticated investors benefit from a “reflection period” and stricter investment limits, while sophisti - cated investors are afforded more flexibility. While the banking monopoly strictly prohibits fintechs from using public deposits to fund lending activities, firms innovate through special purpose vehicles or “fronting” partnerships with licensed banks. 4.4 Syndication of Fiat Currency Loans The ECSP Regulation focuses on intermediation between lenders and project owners. To date, in the field of crowdlending, syndication of loans (a common
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