New peer-to-peer lending platform Plend intends to launch an Innovative Finance ISA (IFISA) after its launch in July 2021, while a SIPP offering may follow.
The consumer lending platform has also unveiled more details about its “modern” credit checking process, which will be led by RateSetter’s former risk officer, Kevin Allen.
Speaking exclusively to Peer2Peer Finance News, Plend’s co-founders James Pursaill and Robert Pasco said that they want to do “true P2P” with a credit process which is more suited for millennials.
This will involve de-weighting factors “which are not relevant to the modern, young borrower” such as how many times a borrower has changed their address. Instead, the platform will place more emphasis on factors such as gambling activity.
“Our philosophy is that we want to judge you on your affordability right now and not penalise you on the mistakes of your past,” said Pursaill.
“There are some things right now which we think have been weighted too heavily and don’t give a good idea of the affordability.”
Plend will not offer auto-investing options. Instead, investors will place their money into individual loans, with individual provision funds offering a safety net in the event of a default.
However, investors will be “strongly encouraged” to diversify their money across a range of loans in order to minimise the risk of capital loss, Pursaill and Pasco said. Target returns will be between 10 and 25 per cent, with a default rate of up to seven per cent forecast.
Plend is applying to be an appointed representative of an unnamed principle. It is currently undergoing beta testing.