Lithuania has been working to position itself as a competitive Fintech center in Europe. In fact in April 2021, Lithuania Reserve bank Governor Vitas Vasiliauskas publicly stated that Fintech should compete with traditional financial services firms.
A recent report issued by Fintech Hub LT shares that in 2020 Fintechs in Lithuania generated revenue of €399 Million topping the year prior which generated €325 million. Revenue in 2021 is once again expected to move higher.
Fintech Hub LT is a group that strives to create favorable conditions for Fintechs and contributes to Lithuania becoming the attraction center for the industry not only in the Baltic region but also across the European Union.
Currently, Fintech Hub LT reports 56 members – licensed Fintech companies in Lithuania, including Electronic Money and Payment Institutions, crowdfunding and P2P lenders, and more.
Fintech Hub LT says that Fintech companies in Lithuania are among the best and fastest adapters to the Covid-19 crisis. Electronic Money Institutions (EMIs) have made the most progress, according to the association.
E-money institutions (excluding Lithuanian Post and those with limited licenses), payment institutions (excluding those with limited licences), specialized banks, blockchain companies, financial software providers, credit providers, Insurtech companies, and crowdfunding operators, now total 305 firms.
Fintech Hub LT estimates that the Electronic Money Institutions (EMIs) segment officially became the largest fintech sector in Lithuania in terms of turnover in 2020.
Vaiva Amulė, CEO of Fintech Hub LT association, says the Covid-19 pandemic has led to a surge in demand for fast, convenient and flexible financial services.
“During the pandemic, the importance of borrowing, finance and money transfer transactions increased, and businesses started to use online trading and alternative financing products more actively. This has been one of the key aspects that has allowed the fintech sector as a whole to grow. In 2020, the Lithuanian fintech sector generated a net profit of EUR 25.7 million. This is around 8% more than in 2019, i.e. before the Covid-19 pandemic. This year’s figures should be even higher.”
Amulė says that Lithuanian Fintech companies have sufficient financial reserves and capital to invest in the quality and development of their products and services.
According to Fintech Hub LT, the Lithuanian Fintech sector employed 2,812 people in 2018, and by 2021, the number of employees increased to about 5,400.
The Fintech sector is growing very successfully says Fintech Hub LT. The annual growth rate (CAGR) is expected to reach 10.2%.
The main drivers of growth are the increasing demand for smartphones and banking apps, rising investment in Fintech companies by private investors, faster internet penetration, and the wider use of artificial intelligence (AI) and blockchain technologies.