LendingCrowd gets fully authorised, big five still waiting

Edinburgh based LendingCrowd becomes latest peer-to-peer platform to receive full authorisation.

It’s been a good few weeks for Scottish peer-to-peer business lender LendingCrowd. After having won the backing of the Scottish Investment Bank last week, the Edinburgh based platform has now become one of only a handful of fully authorised peer-to-peer lending platforms in the UK.

Effective as of 1 November 2016, LendingCrowd has transitioned from interim to full permission under the FCA’s 36H regime, paving the way for ISA manager status. The current rules stipulate that peer-to-peer lenders must be fully authorised in order to apply for ISA manager status. So while the government’s Innovative Finance ISA scheme – which allows peer-to-peer investments to be held within an ISA wrapper – has technically been live since April, it hasn’t yet been a factor for the vast majority of platforms.

Lending Works became the first member of the P2PFA to squeeze through the regulatory hot gates in early October. There are also a small number of platforms in the industry – Crowd2Fund and Crowdstacker, to name a few – that had been authorised prior to the official launch of the IFISA in April. While small in terms of volume, the early growth of Crowdstacker’s IFISA offering would suggest that ISA demand across the industry could be explosive, once the stars are aligned.

LendingCrowd has lent a little over £7m since launching in 2014, according to the Liberum AltFi Volume Index UK.

“Peer-to-peer in-vesting is growing in popularity every day, we are supportive of industry regulation and we’re extremely pleased that LendingCrowd has reached this mile-stone,” said Stuart Lunn (pictured above), CEO and co-founder of LendingCrowd. “Unquestionably, it adds credibility and trust in a relatively young marketplace in which our aim is to be a major player. It also means that we can look to launch our ISA product both directly to investors and through investment platforms, several of which we are already engaged with.”

While encouraging for LendingCrowd, the news of yet another smaller platform’s authorisation may well provoke irritation among the larger players. Meanwhile the likes of LendingCrowd and Lending Works stand to benefit from being the only P2P ISA platforms in town.