Peer-to-peer lending platform Linked Finance has received authorisation by the UK’s Financial Conduct Authority (FCA).
The approval – which marks the end of a two-year process – will facilitate Linked Finance’s plans to enter the UK lending market.
The P2P industry in the UK has grown rapidly in the last decade, spurred on by a comprehensive regulatory framework and a range of Government backed initiatives to promote growth in the sector.
These initiatives include the introduction of the Innovative Finance ISA which offers lenders the opportunity to invest up to £20,000 on alternative finance platforms with tax-free returns. The UK Government has also lent directly to SMEs there, deploying funds via the British Business Bank on platforms including Funding Circle, Ratesetter and MarketInvoice.
Figures for the first quarter of 2017, show that the Irish platform increased lending activity by more than 326% on the same period in 2016 and the platform has now facilitated more than €25 million in loans to Irish SMEs.
Niall Dorrian, CEO, Linked Finance, said: “I am very pleased that we have secured full FCA approval. It puts us ahead of the curve in terms of preparing for any regulation of the sector in Ireland. It also demonstrates to lenders and borrowers here at home that Linked Finance operates to the highest standards.
“We are encouraged that the Dept of Finance has initiated a public consultation in relation to regulation of crowdfunding here in Ireland. The sector is becoming an increasingly important source of funding for Irish SMEs and any actions that will promote further growth in the sector are to be welcomed.
“SMEs are the backbone of the Irish economy and for too long they have had very little choice when it comes to accessing finance. P2P lending, and other innovative financial solutions, are helping to provide business owners with more options, increasing competition and ultimately, supporting the growth of Irish businesses. Any regulation of the sector in Ireland should seek to encourage, rather than inhibit, further diversification within the financial landscape.”
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