LONDON (Reuters) - Britain’s oldest peer-to-peer lending platform Zopa has obtained full authorisation as the markets watchdog works its way through a backlog of licence applications.
Zopa, founded in 2005, said it will now ask for permission from the government to manage savings products that invest in new technology start-ups - and apply for a banking licence.
P2P platform brings together individual borrowers and lenders without a bank being involved. It can be a cheaper form of raising funds, or an alternative source of funds for those turned down by a bank.
A flurry of companies operating under interim licences have queued up for full authorisation by the Financial Conduct Authority (FCA) to operate as P2P platforms.
Full authorisation is needed to offer the new Innovative Finance ISA savings product the government launched in April 2016 - and reassure customers that certain standards are being met in what is still a fledgling sector.
“Zopa, both individually and as a founder member of the Peer-to-Peer Finance Association (P2PFA), has campaigned for peer-to-peer lending to be a regulated activity for a number of years,” Giles Andrews, co-founder and chairman of Zopa, said in a statement.
The FCA confirmed it has given Zopa a full licence.
The watchdog had to warn in March last year that a bottleneck in P2P licence applications meant that few platforms would be able to offer the new ISA on launch day as full authorisation would be needed to sell them.
It has fully authorised 35 P2P platforms, but still has another 44 in the works.
Zopa, along with Funding Circle and RateSetter comprise the bulk of Britain’s P2P sector, the latter two still waiting for full authorisation.
“In addition, we are also working towards applying for a banking licence which will allow us to offer great customer choice whether you are spending, borrowing, saving or investing,” Zopa chief executive Jaidev Janardana said.
The UK government and regulators are encouraging more banking start-ups to take on the “Big Four”, HSBC, RBS, Lloyds and Barclays, who dominate high street lending.
Editing by Ed Osmond