Linked Finance, an Irish Peer-to-Peer (P2P) lending platform, has received full authorization by the UK’s Financial Conduct Authority (FCA) which will enable it to move into the UK market.
The approval comes as the Department of Finance initiates a public consultation process on the potential introduction of regulation of the P2P sector in Ireland.
The authorisation means that the company, which has to-date facilitated more than 870 loans, is well positioned should the Irish Government decide to introduce regulation of the sector in Ireland.
“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,” Niall Dorrian, CEO of Linked Finance said.
Currently, the company said that it is managing its business to meet international best practices introduced in the UK market.
The company said that the FCA authorization is validation of that fact, and it demonstrates that Linked Finance has implemented best-in-class management and controls processes.
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 £20k 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.
This promotion of the sector by the UK Government has helped make the UK P2P lending market the largest per capita market in the world.
For now though, Linked Finance, which has provided loans to businesses across a range of sectors including food processing and manufacturing, is still very much focused on continuing its Irish growth trajectory and maintaining its position in this growing sector.
Figures for the first three months of 2017, show that the Irish platform increased lending activity by more than 326pc on the same period in 2016 and the platform has now facilitated more than €25m in loans to Irish SMEs.
“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,” Dorrian said.
The authorisation from the FCA in the UK will provide further confidence in the platform among local lenders and Irish SMEs who may be considering Linked Finance as a way to access funding, Linked Finance said.