Goji launches P2P lending bond

Goji launches P2P lending bond

A diversifed portfolio of 200 peer-to-peer loans has been created for the intermediary market.

Goji’s Diversified Peer-to-peer Lending Bond claims to be the UK's first diversified peer-to-peer lending proposition with a portfolio of loans from a variety of lenders. 

It is targeting returns in excess of 5 per cent over a one or three-year term.

David Beacham, head of distribution at Goji, said the lending platform in the bond has been selected using risk-based assessments and reviewed against ongoing performance criteria.

The bond is eligible for inclusion within the Innovative Finance Isa.

According to Goji, data from the Liberum Altfi Returns index suggested such loans produce annual returns of 4.5 per cent to 7 per cent, a return which the provider likens to a high yield bond.

Mr Beacham noted the peer-to-peer sector had recently broken through the £10bn barrier.

"Whilst over 170,000 UK investors are active in the sector, very few access the asset class through traditional advice channels," he said. 

"Goji’s new proposition allows advisers and their clients to access this high-performing sector through a highly diversified and risk-managed solution.

"It is now the responsibility of advisers to ensure investors can get quality advice when they seek to engage with the sector.”

Gemma Siddle, director of client services at Newton Aycliffe based IFA firm Eldon Financial, warned of a wide variety of standards in P2P lending.

She said: "The risk varies hugely from one provider to another. Some will have a cash fund in the background, so if some of the loans default there is already a cash sum there to support it.

"So you need a good understanding of the protections available on the loans."