IFISA investments push Lendwise loanbook above £30m
Investments made via Lendwise’s Innovative Finance ISA (IFISA) product have helped to push the lender’s loanbook above £30m for the first time this year.
The consumer lender launched the UK’s first education-focused IFISA in January 2022. Little more than a year later, the tax-wrapping product has proved to be extremely popular with investors, allowing the platform to offer post-graduate loans to even more students.
The Lendwise IFISA has a minimum investment threshold of £1,000, and targets returns of nine per cent. This places it just above the average target returns for the overall IFISA market. According to recent research by Peer2Peer Finance News, by the end of February 2023, a fully diversified IFISA portfolio spread across all 41 IFISA providers would return an average of 8.83 per cent.
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Chief executive Rishi Zaveri believes that the success of the Lendwise IFISA is not only due to these strong returns.
“There is an abundance of property options out there and I think a lot of people see us as a refreshing choice which adds diversification to their portfolio,” Zaveri says.
“We exist to enable those who have the merit, capability and desire to pursue post-graduate education but do not have all the funding in place. We are unique in that way.
“And there is an ESG angle to our product – it resonates with a lot of people. These are ambitious individuals that you’re backing. I think a lot of people really are getting a sense that they’re backing people and they’re getting a financial return – they feel like they’re getting a double return.”
Read more: Lendwise: Education niche protected platform despite headwinds
This ISA season, Lendwise has also benefited from a surge of transfers from other lenders such as Funding Circle and Fluro (formerly Lending Works). The platform’s strong track record of low defaults and strong returns has helped it to stand out among its peers.
Lendwise is one of just seven IFISA providers on the market today which specialises in consumer lending. Zaveri is passionate about the importance of consumer P2P lending, and believes that it is “slightly disproportionate” that there are so few consumer lenders compared to business and property lenders.
“The bar is very high for consumer P2P lenders,” he says. “The small pool of consumer lenders is a reflection of the quality of the platforms.
“Our defaults tend to be low and the way that our product works that allows you to diversify your investments.
“A product like the Lendwise IFISA is very interesting because you are enabling the pursuit of education and in most cases the student is in a better place to repay the loans once they have the qualification. This has come through in our returns and numbers.”
However, for Zaveri the main benefit of the IFISA is its ability to do good.
“Our investors can say that they are helping individuals pursue education and get into good jobs as a result,” he says. “I am very grateful that we are able to do this.”
Read more: Lendwise: The Social Impact IFISA
