Linked Finance, Ireland’s leading P2P (Peer-to-Peer) lending platform, has received full authorization by the UK’s Financial Conduct Authority (FCA). 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.
This authorisation, the culmination of a rigorous 2-year application process, positions Linked Finance well, in advance of any potential regulation of the sector in Ireland.
In the absence of an Irish regulatory framework, Linked Finance has always managed its business to meet international best practices introduced in the more developed UK market and the FCA authorization serves to validation this.
The UK authorization 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.
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. Platforms there lent more than £1 Billion in the first quarter of 2017.
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.
This 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.
Niall Dorrian, CEO of 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 Department of Finance has initiated a public consultation in relation to the 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.”