If you’re keen to invest directly in projects that are working to create positive change, you can do so through an Innovative Finance ISA (IFISA).
An IFISA is a type of ISA that allows you to include investments that have been made via crowdfunded bonds or peer-to-peer loans. As with any ISA, you can invest up to £20,000 per year without paying any tax on your returns or interest.
Here we round up our top 3 investments for a green IFISA:
1. Postgraduate finance – Lendwise
Lendwise, which launched in 2018, matches private investors with borrowers who want to fund their studies to further their career and therefore their earnings potential. It is the UK’s only peer-to- peer lender to specialise in education finance.
The platform provides fair and flexible loans to students who have the personal merit to take postgraduate courses at top business schools and universities in the UK or internationally – but maybe not all of the funding.
Meanwhile, lenders can target a competitive return on their investment of around six to 12 per cent while also making a positive social impact. The minimum initial investment is £1,000.
2. Solar energy – Energise Africa
Impact investment platform Energise Africa has launched a new bond offer to finance solar power for low-income families in Kenya.
Sollatek is 100 per cent Kenyan owned and managed, and has been operational in East Africa for over 30 years. During this time the market for solar products has changed significantly, and Sollatek has the experience and local knowledge to help the estimated 16 million individuals in Kenya who are currently ‘off-grid’ gain access to clean, reliable energy. Over the last eight years Sollatek has sold around 889,000 solar lanterns and solar home systems (SHS).
For every £200 invested into this campaign Sollatek will be able to source and distribute a solar home system, which a Kenyan family can pay for in affordable instalments over 18 -24 months
Energise Africa is aiming to raise £90,000 for this project. Minimum investment is £50 and the expected interest rate is 5.5 per cent per year over two years.
3. Green micro financing – Energise Africa
Energise Africa also has a bond offer to help provide financial and non-financial services to low-income people, groups and businesses in the Democratic Republic of Congo (DRC).
Founded in 2012, Guilgal’s mission is to provide loans to micro and small entrepreneurs in the DRC who have limited access to traditional financial services. Guilgal aims to reach 50 – 80 clients (around half of these are women) through this offer. Its vision is to grow to become a leader in green microfinancing in the DRC, and to become a benchmark for other microfinance institutions.
Energise Africa is aiming to raise £250,000 for this project. Minimum investment is £50 and the expected interest rate is 5.5 per cent per year over two years.
Risk warning: Your capital is at risk and unlike other ISAs, IFISAs are not covered by the Financial Services Compensation Scheme (FSCS).