According to consultancy firm Bovill, the number withdrawn P2P lending applications in the UK have grown as regulatory requirements increase. Since the start of April 2014, FCA (Financial Conduct Authority) has received 114 applications from new peer-to-peer lenders seeking full authorization, but thirty applications have now been withdrawn.
Commenting on the withdrawals, Gillian Roche-Saunders, head of venture finance at Bovill said,
“The high number of withdrawals suggests that the FCA is setting the bar high when it comes to full authorization for P2P lenders – the process appears to be much tougher and more costly than many firms first anticipated. Many firms are now hiring compliance officers or sourcing external advice to help them navigate the authorization process. The industry is still very new; however, which means finding the right level of expertise can be a challenge.”
While regulation may be discouraging some firms from obtaining full authorization, the UK P2P lending regulation (regulation within the segment can differ significantly country by country) is helping to shore up the new lending type. The UK P2P lending market is among the world’s largest and continues to grow at a robust rate and regulation will ensure only the strongest organizations are able to receive full authorization and lend within the UK.
Overview by Tristan Hugo-Webb, Associate Director, Global Payments Advisory Service at Mercator Advisory Group
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