Creditstar secures FCA licence for consumer lending expansion

By Vriti Gothi

European FinTech Creditstar UK has received authorisation from the Financial Conduct Authority to operate as a mainstream consumer credit lender, enabling the company to scale its presence in one of Europe’s largest retail lending markets.

Following the approval, the company has launched fully digital personal loans of up to £10,000, with repayment terms of up to 60 months. The offering is designed to deliver a streamlined borrowing experience, with end-to-end digital processing and transparent terms.

The authorisation also marks a strategic shift in the firm’s UK business model. Creditstar previously operated a limited high-cost short-term credit portfolio in the country but has now ceased issuing such loans and will run off the existing book as it transitions to mainstream consumer lending.

Headquartered in London, the UK entity forms part of a broader European operation that provides consumer credit across seven EU markets. The group combines open banking data, credit bureau information, and third-party datasets with AI-driven analytics to assess affordability and creditworthiness, aiming to balance risk control with a fast customer journey.

“Receiving this FCA approval is a major milestone for CreditStar Group,” said Aaro Sosaar, Founder and CEO. “This authorisation allows us to further expand our technology-enabled lending platform in the UK and bring our disciplined, data-driven approach to one of Europe’s largest consumer credit markets. We see strong long-term potential in the UK and are committed to building a scalable and responsible lending business here.”

To support its expansion, the company has opened a new London office that will serve as an operational hub for UK and group-wide activities.

The development reflects a broader trend among European FinTech lenders moving away from high-cost short-term products toward regulated, mainstream credit offerings. As regulatory scrutiny around affordability and consumer protection intensifies, FCA authorisation is increasingly seen as a prerequisite for scale and institutional credibility in the UK’s competitive digital lending sector. The move also underscores growing reliance on alternative data and AI-based underwriting to expand access to credit while managing risk.