Peer-to-peer platform Folk2Folk gets authorised by the regulator
Folk2Folk has become the largest fully authorised peer-to-peer platform in Britain.
The company announced on Wednesday that the regulator, the Financial Conduct Authority (FCA), has given it full operating permissions, allowing it to offer the Innovative Finance ISA and giving it a stamp of approval that it can market to customers.
Cornwall-based Folk2Folk lets people lend money to local projects and business in their area and has lent over £125 million ($157.5 million) across its platform since launch in 2013.
It is different to other crowdfunding platforms in that it has a network of shops around the countries where businesses and lenders can talk to staff about lending on the platform.
At their simplest, peer-to-peer lenders, also known as marketplace lenders, allow individuals to lend money directly to either people or businesses, bypassing banks who usually act as intermediaries. Investors get good interest rates and borrowers often get cash quicker and easier than they would from the banks.
Jane Dumeresque, Folk2Folk’s CEO, says in an emailed statement: “We are delighted that the FCA has granted Folk2Folk its full authorisation for peer-to-peer lending.
“I think it speaks volumes about Folk2Folk as a business having gained its full FCA authorisation ahead of many of the industry’s leading and larger platforms.”
Zopa, Funding Circle, and RateSetter — the UK’s three biggest peer-to-peer lending platforms — are still waiting to be authorised over 2 years after the government announced that the FCA would authorise the sector. All three are operating under what is known as interim permissions and all three dwarf Folk2Folk, with over £1 billion lent over each platform.
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