CROWDSTACKER’S Innovative Finance ISA (IFISA) is attracting £1m from investors each month, the peer-to-peer lending platform’s chief executive has revealed.
Chief executive Karteek Patel said three out of four Crowdstacker investors now lend through the tax-free product. This is a marked increase from last September, when Patel said that 50 per cent of the firm’s investment came through the IFISA.
He said he expects even more take-up as ISA season approaches before the end of the tax year in April.
“Naturally in ISAs there are some who plan in advance, but there is always a call to action that if you don’t use your ISA allowance you will lose it,” Patel told Peer-to-Peer Finance News.
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Crowdstacker was one of the first platforms to receive full Financial Conduct Authority (FCA) authorisation and ISA manager status last April, but Patel says he is not worried about competition once the more established names get approved. The ‘big three’ – Zopa, RateSetter and Funding Circle – are still awaiting the regulatory go-ahead.
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“Just by some of the bigger players being in there, the IFISA will get more coverage and traction,” said Patel.
Last October, Crowdstacker released data that revealed 90 per cent of its IFISA investors had not lent through the platform before, affirming predictions that the product will open the P2P industry up to more retail investors.
The company launched in June 2015 and its recently-filed accounts for the year ending March 2016 show its total assets were up from £4,379 to £125,390, but losses increased from £15,721 to £385,789.
However, Patel attributed the widening losses to increased investment into the business.
“This is the natural process for fintech companies,” he said. “We have been investing in technologies, attracting new investors and members.
“We are now investing with more money to get to a point where we can raise more quicker. For us we are expecting to turn a profit in the next financial year.
“As a business we have to get to a point where we are raising 50 per cent more each month to be at a breakeven level.”
He said he expected more FCA scrutiny of the sector in 2017 as part of the regulator’s review, with a particular focus on investor risk questionnaires and credit quality.