Three of the UK’s largest Innovative Finance ISA (IFISA) providers are still closed to retail investors, almost a year and a half after the Covid-19 pandemic sparked widespread uncertainty in the lending market.
At the beginning of the pandemic, four of the UK’s largest IFISA providers – Zopa, Funding Circle, LendingCrowd and RateSetter – temporarily closed to new IFISA investors. RateSetter went on to be acquired by Metro Bank, while the other three platforms are yet to re-open to retail investors.
A LendingCrowd representative told Peer2Peer Finance News that it had no new loans coming into the retail market and it was encouraging lenders with cash in their accounts to transfer their money to interest-bearing accounts instead.
LendingCrowd added that its credit committee evaluates the situation every month and will update investors as soon as it decides to reopen.
Meanwhile, a Zopa spokesperson said that it is “continuing to keep the situation regarding IFISAs under review” but does not have any specific announcements at present.
Similarly, it is understood that Funding Circle is monitoring the situation closely but does not believe that the time is right to open up to retail investors again.
Funding Circle and LendingCrowd were among the clutch of alternative lenders that were authorised to take part in the government-backed Covid-19 loan schemes last year and both are believed to have applied to its successor, the recovery loan scheme.
These government-backed loan schemes do not permit retail investment, with all funding coming from institutional investors instead.