World’s first peer-to-peer lender gets full authorisation

By Ryan Weeks on Thursday 11 May 2017

Alternative Lending

Zopa granted full authorisation by FCA, plans IFISA launch.

The deadlock is broken. Roughly 18 months after submitting its application for full authorisation as a peer-to-peer lender, Zopa has been authorised.

Zopa is the first of the UK’s “big three” peer-to-peer lenders to get the green light. Funding Circle and RateSetter continue to await word.

A relatively large number of small and medium sized platforms have been authorised over the past six months, including Peer-to-Peer Finance Association (P2PFA) members LendingWorks, Landbay and Folk2Folk. Zopa founded the P2PFA alongside Funding Circle and RateSetter in 2011.

Peer-to-peer lenders must hold full permissions under 36H rules in order to offer Innovative Finance ISA investments, which free investors from income tax for up to £20,000 of investment. The next step for Zopa is to seek permission from HMT to become an ISA Manager, which is something of a formality, typically taking two to three works to come through.

“The authorisation process has been rigorous and in-depth and involved extensive scrutiny of our business,” said Jaidev Janardana (pictured), CEO of Zopa. “We will continue to focus on serving UK borrowers and investors through our market-leading products and best-in-class customer experience. In addition, we are also working towards applying for a banking license which will allow us to offer great customer choice whether you are spending, borrowing, saving or investing”.

Zopa announced that it would be pursuing a banking licence in November of last year.

Giles Andrew, co-founder and chairman of Zopa, said that the firm has campaigned for peer-to-peer lending to be a regulated activity for a number of years, both individually and as a member of the P2PFA. 

“We are delighted to receive our full FCA authorisation,” he said. 

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