UK Strives For Global FinTech Leadership – Plus Loan Auction Latest
More moves on the PR front from the UK’s industry body Innovate Finance. It’s just launched the International FinTech Group to promote the UK as a global leader in the Fintech sector.
This move follows the publication of the Kalifa Review of UK FinTech in 2021. We’ve reported on the Kalifa review before, and blogged on it here.
Co-chaired by Innovate Finance and the Department for International Trade (DIT), the new Group will convene for 12 months to increase collaboration across the sector.
It aims to bring together organisations across the industry and the government to promote the growth of the UK fintech ecosystem, particularly across international markets.
The Group will continue the work begun by Ron Kalifa’s report, which put forward a number of recommendations on international competitiveness and called for the industry to capitalise on the UK’s fintech opportunities.
“A year on from the Kalifa Review, important steps are being taken to further advance and strengthen the UK’s world-leading FinTech sector and implement the report’s recommendations,” CEO of Innovate Finance Janine Hirt said.
“The international focus was a core part of the Review, and I’m delighted that we are collaborating with the DIT to bring this key initiative to life.”
Innovate Finance reported in January that the UK fintech sector surpassed $11.6bn last year, showing more than a 200 per cent annual increase.
This puts the UK in the second top destination in the world for fintech investment, behind the US but ahead of the next six European hubs combined, cementing the country’s position as a leader in the field.
Loan Auction Latest
- The end of the tax year is approaching, and we currently have four loan auctions on site.
All these loans can be held, up to £20,000, as Innovative Finance Individual Savings Accounts (IFISAs). IFISAs are explained in more detail below. Here’s the latest from the auction room:
- Mar-Key has a credit rating of A+, a yield of 7 per cent and a term of two years. It is currently 18 per cent filled.
- HTHL Ltd has a credit rating of A+, a yield of 7 per cent and a term of one years. It is currently 15 per cent filled.
- Fleetwood Legal has a credit rating of A, a yield of 7 per cent and a term of one year. It is currently 31 per cent filled.
- Bonnington Law has a credit rating of A, a yield of 7 per cent and a term of one year. It is currently 20 per cent filled.
- Harris & Co. has a credit rating of A, a yield of 8 per cent and a term of one year. It is currently 10 per cent filled.
- You can see detail on each by logging in and downloading the credit note.
Historical Performance And IFISA Process Guide
- Money&Co. lenders have achieved an average return of more than 8 per cent gross (before we deduct our one per cent fee).
That figure is the result of over £24 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.
- Money&Co. has been lending for over 5 years and has only had two bad debts so far, representing a bad debt rate of 0.03 per cent per annum.
All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.
So here’s our guide to the process:
- Step 1: Register as a lender. Go to the login page, and go through the process that the law requires us to effect. This means we have to do basic checks on you to comply with money-laundering and other security requirements.
- Step 2: Put money into your account. This is best done by electronic transfer. We can also process paper cheques drawn in favour of Denmark Square Limited, the parent company of Money&Co.
- Step 3: Buy loans in the loan market. Once you’ve put cash in your account it will sit there – and it won’t earn interest until you’ve bought a piece of a loan. It’s this final step that requires lenders and IFISA investors to be pro-active. Just choose some loans – all loans on the Money&Co. site can be held in an IFISA – and your money will start earning tax-free interest.
The ISA allowance for 2020/21 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.
Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.
Risk: Security, Access, Yield
Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.