Lendwise is launching the first education-backed Innovative Finance ISA (IFISA) later this month, after completing an initial rollout to friends and family.
The IFISA will target returns of between four per cent and 12 per cent, with a minimum investment of £1,000.
All IFISA investments will be used to fund the platform’s education loans, which are primarily used by post-graduate students seeking a fixed rate loan to fund their studies. Loan repayments typically start six months after graduation.
Kypros Mouzouros, co-founder of Lendwise, told Peer2Peer Finance News that the IFISA launch is a response to increasing demand from retail lenders in the peer-to-peer lending space.
“As we have grown since inception and built our three-year track record with great results, we see continued demand for the lending side of our product, so it makes sense to introduce the option of being able to offer our strong returns in a tax-efficient wrapper,” he said.
“We are also seeing increasing demand given the latest withdrawals from the retail space of a number of P2P lending platforms.
“Most importantly however, we offer a truly unique exposure among our P2P peers: we are the only P2P platform in the UK dedicated to education finance. Our product means that you can earn a real commercial return whilst making a difference.”
Mouzouros added that initial word-of-mouth and referrals indications are “very positive”.
“We are the only P2P platform in the UK dedicated to education finance which means that lenders on our platform are making an impact investment,” Mouzouros added.
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“We focus on funding the education for ambitious individuals who have the merit and ability but not all of the funds to achieve enrolment.
“We analyse our borrower’s future earnings potential so we take outcomes into account when assessing creditworthiness, not just a credit score. Our borrowers end up with a great ability to repay after taking our loans due to their enhanced skills and career prospects.
“Getting this type of differentiated exposure in an IFISA which delivers above market yields, has never been as easy as it is with a Lendwise IFISA!”