Zopa just got full approval as a P2P lender from the Financial Conduct Authority paving the way for Innovative Finance Isa

Lynsey Barber
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Zopa can npw launch an Innovative Finance Isa (Source: Zopa)

Zopa has become the UK's biggest peer-to-peer lender (P2P) to date to be granted full approval by the City watchdog.

The Financial Conduct Authority (FCA) has given the firm the green light after two years of waiting, paving the way for Zopa to launch an Innovative Finance Isa (Ifisa)

Read more: Your guide to the Innovative Finance Isa

"The authorisation process has been rigorous and in-depth and involved extensive scrutiny of our business," said Zopa chief Jaidev Janardana.

A handful of smaller firms have been fully approved but but the FCA has taken some time to assess larger P2P lenders such as Zopa and others like Funding Circle and RateSetter.

The FCA said it would regulate activity of P2P lenders in 2014, taking over from the Office for Fair Trading which oversees consumer credit, and lenders have had interim permission from the regulator since since then.

Savers have been able to put P2P loans within the tax efficient wrapper since last year after the measure was promised in former chancellor George Osborne's 2015 Budget. Zopa, which was the first P2P lender to launch back in 2005, will now seek approval from HMRC for Isa management, the final hurdle before launching its Ifisa.

Read more: New Isa shows P2P is a mainstream investment option

"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," said Janardana.

The lender late last year revealed it is applying for a banking license.

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