Crowdstacker, an early-stage peer-to-peer lender for mid-sized businesses, is seeing a surge in investment volumes off the back of the launch of the Innovative Finance ISA (IFISA). The platform has lent approximately £14m since launching in June 2015, with over £7m invested since the advent of the IFISA in April.
Data released by the company today shows that 9 in every 10 IFISA investments made through the platform come from investors who are new to Crowdstacker. Of course, Crowdstacker is not an especially old platform, and would hope to be onboarding a large number of new investors regardless, but nevertheless the lure of the IFISA seems to have had a pronounced effect on volumes.
Crowdstacker is one of only a handful of fully authorised peer-to-peer lenders in the UK. Others include Crowd2Fund and, as of last week, Lending Works. The largest peer-to-peer to lenders continue to await the green light from the FCA. Peer-to-peer platforms cannot apply for ISA manager status until they are fully authorised, and as such the newly formed IFISA is yet to truly take off.
However, developments at Crowdstacker would appear to suggest that demand for the IFISA – once fully fledged – could be explosive.
Crowdstacker’s data shows that the average amount invested on the platform using the IFISA is £7,700. 18 per cent of investors have chosen to realise the full tax benefits of the wrapper by using their full annual allowance of £15,240. Just 7 per cent of Crowdstacker investors have moved money from another ISA type into the IFISA.
“2015-16 Government data shows that £80 billion was invested via other types of ISA, typically in cash accounts or stocks and shares," said Karteek Patel (pictured above), CEO of Crowdstacker."But the popularity of the IFISA suggests that within a few years a sizeable portion of this could be providing a direct boost to the UK economy by being invested straight into growing UK SMEs.”