Lithuanian fintech startup SME Finance is planning to launch a neobank targeting small and medium-sized enterprises in mid-2021.

The bank will only be operating online via a mobile app, providing financial services such as loans, transfers and deposits.

Mindaugas Mikalajūnas, CEO of SME Finance said,

‘We were already thinking about a neobank when we were founding SME Finance but first of all we wanted to create a strong base of clients and capital, and to wait for the time when a bigger demand for banking services of this type is developed in the market. We believe that now is the right time, as the area of financial services is becoming digitised – it is a global tendency.

 

However, the niche of neobanks remains blank – there is no strong regional or even global market player who would be oriented to business clients of such type; the closest example to a neobank for business is Coop Pank operating in Estonia, Atom bank in the UK, or Revolut that is providing global services’.

The new neobank aims to differentiate itself with competitive pricing, faster and simpler servicing process when compared to traditional banks.

SME Finance and the neobank will operate as two independent legal entities with separate management teams. It plans to integrate the trademark of SME Finance into the bank’s name.

According to Mindaugas, the Bank of Lithuania is interested in attracting new fintech enterprises and increasing the competition between the banks in the market, so the licensing process was relatively simple and fast.

SME Finance submitted the documents for the licensing of a bank to the Bank of Lithuania in February 2020 and expects to start operating in mid-2021. SME Finance is also considering expansion to other Baltic states and Poland in the future.

Featured image: Mindaugas Mikalajūnas, CEO of SME Finance