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.
