Defacto files for European banking licence

By Milan Rojan

Defacto has filed an application for a European credit institution licence with the Autorité de Contrôle Prudentiel et de Résolution (ACPR) and the European Central Bank, marking a key step in its plans to expand across Europe from 2027.

The application has followed five years of growth during which the company has provided more than $1.76 billion in working capital financing to over 20,000 small and medium-sized enterprises. Defacto has developed a technology-driven lending platform designed to deliver rapid access to working capital through direct origination and embedded finance partnerships.

Jordane Giuly, Co-founder and CEO of Defacto, said: “AI is at the heart of our credit model, our scoring and the way we build products. But AI does not replace a licence, or the years of work it takes to build a sound framework.”

The FinTech has said its business model has approached profitability, supported by a proprietary AI-powered credit assessment engine, automated lending processes and access to securitisation markets. The platform has been built to improve operational efficiency while strengthening credit risk management and lending decisions.

Charlotte Gounot, Deputy CEO of Defacto, said: “Filing our application with the ACPR and the ECB is a significant milestone. Our ambition is to roll out our solutions across Europe.”

Defacto has already operated as a regulated specialised finance company under the ACPR, with the proposed banking licence expected to support broader lending activities across the European market, subject to regulatory approval.

The company has outlined plans to expand initially into Germany and Belgium through three existing distribution channels comprising direct small and medium-sized enterprises lending, referral partnerships and embedded finance via Defacto Connect, its financing infrastructure for FinTechs, B2B platforms and financial institutions.

The expansion has reflected growing demand for technology-enabled working capital solutions as SMEs continue to seek faster and more flexible access to financing across European markets.