Peer-to-peer lender Linked Finance has received full authorisation from the UK's Financial Conduct Authority (FCA), paving the way for the company to enter the British market.

Peer-to-peer lending is a form of non-bank finance where individuals who have money they are willing to lend connect directly with those looking for funding for a project or business.

The sector is still in its infancy in Ireland, though the Department of Finance has initiated a public consultation process on how it might be regulated here.

Linked Finance's Irish peer-to-peer lending rose by more than 326% in the first quarter of the year, when compared with the same period a year ago.

The lender has facilitated €25m worth of loans to SMEs since it launched in 2013.

Linked Finance CEO Niall Dorrian said the FCA approval "puts us ahead of the curve in terms of preparing for any regulation of the sector in Ireland.

"It also demonstrates to lenders and borrowers here at home that Linked Finance operates to the highest standards.

"We are encouraged that the Department of Finance has initiated a public consultation in relation to regulation of crowdfunding here in Ireland.

"The sector is becoming an increasingly important source of funding for Irish SMEs and any actions that will promote further growth in the sector are to be welcomed."