In brief: Latvia creates new license to attract fintech players

Latvia introduces a new licence to recognise a new type of financial institution as "specialised credit institutions", a status that officially entered into force on 6 January 2026. These institutions will be able to operate as banks while benefiting from initial capital reduced to EUR 1 million, compared with 5 million for a traditional bank licence.

This new framework allows these actors to collect deposits, issue loans, offer payment services, leasing, investment and crypto-active services, with the possibility of passporting their activities throughout the European Union.

The model takes the lines of a device already deployed in Lithuania. The aim is to strengthen competition, diversify sources of financing and facilitate the entry of new players into the Latvian credit market.

Fintech Latvia Association, an organisation of fintechs and other financial entities operating outside the traditional banking sector in Latvia, indicates that there is already a first market interest, coming from fintechs, payment institutions and non-bank lenders who assess the possibility of applying for this licence.

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