Innovative Finance ISA

IFISA investments give P2Ps a record-breaking year

Peer-to-peer lenders have been celebrating a record-breaking 2018, thanks to increased investment in Innovative Finance ISAs (IFISAs).

Each of the ‘big three’ platforms have now reached its £3bn lending milestone. While Funding Circle was the first to hit the £3bn mark at the end of December 2017, Zopa followed suit in January of 2018, while RateSetter broke its £3bn lending milestone at the end of December 2018.

Each of these platforms has seen inward investment boosted by the popularity of their IFISA products. RateSetter has returned an average of 4.4 per cent to its IFISA investors, while Zopa offers 4.5 per cent via its ISA Core account and 5.2 per cent via ISA Plus. Funding Circle’s IFISA pays between six and seven per cent to its investors.

Beyond the ‘big three’, a number of other P2P platforms and IFISA providers have also reported a record-breaking year.

Business lender ThinCats lent £112m in 2018, more than double the amount lent in 2017. Last year, ThinCats debuted its own IFISA offering, and while returns are not yet available for this product, the platform has returned average annualised interest rates of 10.77 per cent to its investors since its inception in 2011.

Business and property lender Assetz Capital also hailed 2018 as a significant year for its IFISA. The Assetz Capital ISA returned more than £50m in interest to investors last year, which helped the platform to pass its £500m manual lending milestone.

Speaking about the rising popularity of alternative finance platforms, ThinCats’ chief executive John Mould said that it had been a great year for his company and the wider P2P community.

“The message is beginning to get through that the banks can’t match the flexibility or long-term investment outlook offered by institutional and retail funders,” he said.

“I expect this trend to continue and I would encourage more businesses to look at alternatives to the banks.”

Originally Published: Friday, January 18th, 2019
Updated: Friday, January 18th, 2019

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