Peer-to-peer lending platform gets the go-ahead to take on the UK market.
Linked Finance is a peer-to-peer (P2P) lending platform that was launched in 2013 and has thousands of registered users.
After a rigorous two-year application process, Linked Finance has been given full authorisation from the UK’s Financial Conduct Authority
‘P2P lending, and other innovative financial solutions, are helping to provide business owners with more options’
– NIALL DORRIAN
To date, the company has facilitated more than 870 loans and more than €25m in funding for Irish SMEs.
The platform says that it has increased lending activity by more than 326pc between Q1 2016 and Q1 2017.
“I am very pleased that we have secured full FCA approval,” said Linked Finance CEO Niall Dorrian.
“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.”
The authorisation 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 is in contrast to Ireland, where regulations surrounding crowdfunding are still in their infancy.
“We are encouraged that the Department of Finance has initiated a public consultation in relation to regulation of crowdfunding here in Ireland,” Dorrian said.
“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.”