Fintech 2026

HUNGARY Law and Practice Contributed by: Pál Rahóty, Lakatos, Köves & Partners

4.3 Sources of Funds for Fiat Currency Loans The key distinction is whether lenders fund loans themselves or merely provide technology and servic - ing infrastructure. If the fintech originates and funds the loans on its own balance sheet, it must be licensed in Hungary as a credit institution or financial enterprise and fund lend - ing through equity, shareholder loans, bank credit lines or institutional investors. It cannot take deposits from the public unless it holds a banking licence. If it offers BNPL to consumers, consumer credit rules (includ - ing creditworthiness assessment and disclosure) apply. If it structures merchant-funded BNPL (where the merchant subsidises the cost), it must ensure the model does not inadvertently qualify as unauthorised deposit-taking or collective investment activity (Hun - gary is updating its regulatory approach to BNPL to align with the EU’s new Consumer Credit Directive, so that most deferred-payment products will be treated as regulated consumer credit unless they meet narrow short-term exemptions – these changes are expected to take effect from 20 November 2026). By contrast, where a company operates as a white- label technology provider, and the actual lender is a licensed bank or financial enterprise, the fintech typi - cally does not fund loans itself. Instead, it earns ser - vice fees while the regulated lender provides capital and bears credit risk. In this model, the regulatory burden (capital, lending licence, AML obligations as lender) sits primarily with the licensed financial institu - tion, while the fintech is subject mainly to outsourc - ing, data protection, ICT and contractual compliance requirements. The regulatory risk therefore turns on whether the fintech is acting as lender, co-lender or pure infrastructure provider. 4.4 Syndication of Fiat Currency Loans In Hungary’s fintech space, one does not typically see large-scale retail P2P-style syndicated consumer lending platforms like in the UK or USA. Institutional funding and risk participation structures may occur. True retail syndication could also trigger crowdfunding or investment regulation and is therefore uncommon in the Hungarian fintech market.

key regulatory focus is not the use of algorithms per se, but ensuring that automation does not weaken oversight, transparency or conflict management com - pared to traditional advisory models. 4. Online Lenders 4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities There are fintech lenders and digital lending solutions in Hungary, though the market is still emerging and is not as large as in some other EU countries. Sev - eral Hungarian fintechs offer digital financing prod - ucts such as digital factoring, SME lending and BNPL platforms, and fintech service providers with lending- related infrastructure are active in the local market. All fiat lending requires proper authorisation, but con - sumer lending is subject to extensive conduct and disclosure rules, SME lending is moderately regulat - ed with fewer mandatory form protections, and large corporate lending is primarily governed by prudential supervision and contract freedom rather than borrow - er-protection law. 4.2 Underwriting Processes In Hungary, underwriting is generally risk-based and increasingly automated. Consumer lenders typically check credit bureau data ( Központi Hitelinformációs Rendszer – KHR), verify income, assess debt levels and run internal scoring models. Fintech lenders often use digital tools, including transaction data and auto - mated decision engines, to speed up approvals. For SMEs and corporates, the focus is more on financial statements, cash flow, business performance and col - lateral. Regulation does not dictate the exact scoring model, but it does require lenders – especially in consumer lending – to assess creditworthiness responsibly and document their decision. Banks face additional inter - nal risk management and capital requirements, while fintechs have more flexibility in how they design their models, as long as they assess risk properly and com - ply with consumer protection and data rules.

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