It’s a fascinating time to be in Peer to Peer Lending - as an investor, borrower or platform manager.
As noise in the sector increases in the April 6th build up to the Innovative Finance ISA (IFISA), here is an update on Madiston LendLoanInvest's position on the IFISA and our plans for the future.
The Innovative Finance ISA
The first step to being able to offer our investors Peer to Peer loans in the IFISA wrapper, is getting our “Full Permissions” from the Financial Conduct Authority (FCA). Like all Peer to Peer Lending platforms established before the FCA took on the regulation of the industry, we have “Interim Permission” and in October 2015 we were allowed to apply for Full Permission. This, we understand, may take some time to come through as the FCA has a huge workload to process all the applications. So, the IFISA is not lining up to be an April 6th “gunshot start” but a gradual process where IFISA opportunities like ours will emerge over a period of time with many years of benefit ahead.
Right now, we are preparing ourselves and our product and we are keen to bring this opportunity for Peer to Peer Lending in a tax-free wrapper to you as soon as we can. Remember for Peer to Peer Lending, there is now a tax-free amount of £1,000 in interest earned in a year for basic rate payers (£500 for higher tax rate payers).
Judging by market feedback, Madiston has one of the most comprehensive Peer to Peer Lending software platforms which, as you know, we make available for use by other firms (see http://www.finbee.lt/en/). Behind the scenes, major enhancements and new facilities have been made and very soon, Madiston LendLoanInvest will be upgraded to the latest version of the software. This will help us structure our IFISA offering and provide a simpler mechanism for our lenders and borrowers. This will be a comprehensive and important upgrade to our business model, processes and branding.
Opportunities in Europe
Whatever the UK’s decision on whether we remain in or leave the Europe Union on 23 June 2016, we believe the Peer to Peer Lending industry will continue to expand across Europe. With the UK leading the way in terms of regulation of the industry, we anticipate there will be growing cross-border opportunity. We aim to work with companies like our joint venture partner, FinBee in Lithuania, to explore these opportunities further for our UK lenders and borrowers.
…and the rest of the World
With many enquiries for our software platform from across the world, Peer to Peer Lending is clearly gathering momentum globally. Our latest software client (details to be announced in due course) will be launching in yet another emerging area for Peer to Peer Lending.
Peer to Peer Finance Association (P2PFA)
The size of our loan book and the presence of our software division, meant that we were unable to renew our membership of the P2PFA this year. We joined the P2PFA before we launched Madiston LendLoanInvest to demonstrate our commitment to high standards. We continue to run our business on those principles and according to the Financial Conduct Authority’s industry regulation. Even outside the P2PFA, we will be helping to shape the future of the industry globally.
There is much to do to deliver our plans but we look forward to bringing you more news as soon as we’re able to report it. If you have any questions on any of the above, please do get in touch with us, we will be pleased to hear from you.