Unbolted and Abundance Investment have pledged to keep their low minimum investment thresholds, despite the increased cost of compliance in the retail space.
The Financial Conduct Authority (FCA) has imposed stricter regulations on the peer-to-peer lending sector, including marketing restrictions and more stringent investor onboarding processes.
This has been compounded by the new Consumer Duty, introduced at the end of July, which further increases the onus on all regulated firms to set high standards of customer service and protection.
Higher compliance costs have led platforms such as JustUs, Brickowner and most recently, Kuflink to increase their minimum thresholds.
Read more: How higher investment thresholds can protect peer-to-peer investors
However, some platforms remain open to extremely small minimum investments.
P2P pawnbroking platform Unbolted offers short-term loans secured by luxury assets, which can be funded with as little as £1. Annual returns can be as high at 10.2 per cent.
Chris Brown, head of lending and operations at Unbolted, said the platform felt “no need to impose a minimum investment level”.
“Our platform works on the fast flow of lots of six-month loans, some of which are at a relatively low value,” he added.
Read more: How to invest in an IFISA with less than £1,000
Meanwhile, ethical crowd bonds platform Abundance Investment offers its users the chance to invest in local councils and companies that are developing green energy projects. Investors can earn annual returns of up to eight per cent with a minimum investment of £5.
Abundance’s managing director Bruce Davis said that the platform has “no plans” to increase its minimum threshold, “especially given our focus on democratic finance working with local councils”.
He added that while stricter regulations on the sector “have had a significant impact on our ability to recruit new customers”, Abundance has “no plans to change one of the founding principles of the platform”.
Davis, who is also a founding director of the UK Crowdfunding Association (UKCFA), which represents the industry, said that “the UKCFA continues to communicate both with the FCA and the Treasury about the unintended consequences of the new rules.”
