CCAF Focus On UK And FCA FinTech Moves – Plus Loan Offer Moves
As we reported yesterday, the Global COVID-19 Fintech Impact and Resilience Study, published by the Cambridge Centre of Alternative Finance (CCAF), the World Bank Group, and the World Economic Forum, has concluded that the FinTech industry was more resilient to the pandemic than previously stated in an earlier report from December 2020.
Money&Co. was one of 1,448 FinTech platforms operating in 192 areas worldwide to contribute to the study. One of CCAF’s conclusions is that the FinTech industry displayed growth at an increased pace in every sector except for data analytics.
A key area in need of development this year was in communication between market stakeholders and regulatory authorities to hasten the speed of authorization processes and requirements by FinTech firms.
Overall, the study reported that the FinTech industry is resilient to the pandemic and in the past year has shown higher assessments and an increase in capital raising activities.
Below is a brief extract from the report, which touches on themes with which regular readers of this News site will be familiar.
The FCA has sought to address its duties to both protect consumers while also promoting effective competition. To address these while ensuring the sandbox is appealing to a variety of innovative firms the FCA has pursued the second approach which firstly encourages firms to develop and arrange for robust consumer protection safeguards, while the FCA can then go on to ensure these safeguards are suitable and adequate. An added benefit of this approach is that the FCA can also gather intel on new and innovative approaches to consumer safeguards.
Loan Offer Latest
A loan offer from Harris & Co., a borrower that operates in the litigation claim sector, is available on site. The loan is risk-rated A by our credit committee. It has a gross yield of eight per cent, for a fixed term of 12 months. The loan offer is currently 78 per cent subscribed, and will close when filled.
For more detail, login or register here.
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 7 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.