Elfin Market


As mentioned in my CrowdProperty analysis, Peer-to-peer (P2P) and peer-to-business (P2B) are some of my favourite types of investment. ElfinMarket is in the P2P sector. Based around a credit card, this is quite a unique business model.

Elfin Market stands out for the following reasons:

  • UK based (which is where I am based)
  • Authorised and regulated by the Financial Conduct Authority
  • Tax free investment via an Innovative Finance ISA
  • 6% interest pa
  • Completely hands off so very passive
  • Very strict lending criteria so default rate should be very low

The blurb from the platform…

“Where peer-to-peer lending meets credit cards

We think the credit card market has been too unfair for too long. We are aiming to change that.

We’ve created a line of credit, the Elfin Purse, which works like a credit card – just a lot cheaper. Borrowers get a credit limit and can withdraw and repay whenever they want. As an investor, your money is used to fund these Elfin Purses. You earn interest on any withdrawal borrowers make, whether it’s to buy a new computer or just a cup of coffee!

With the Elfin Purse, we aim to offer a cheaper and fairer alternative to traditional credit cards. By investing, you help us make this happen.”

How does it work?

After signing up and passing all the KYC/AML checks you are ready to go. Deposit your GBP£ on the platform via bank transfer and your money is automatically diversified across their loan portfolio.

There are 2 choices to make. Firstly how long you would like to deploy your funds. The longer the time frame the greater the interest, with a maximum of 3 years. The second choice relates to your interest. You can re-invest it or withdraw it from the platform.

The only thing left to do is to sit back and wait for the interest to come in.

Who do they lend to?

As you can see, they have a very strict lending criteria, with only 7% of applications accepted. Depending on the credit history they will be assigned an individual interest rate.

My journey with ElfinMarket

This is a very young start up company. They were first registered in 2016 and have been building their product since then. They launched in 2020 and conducted an equity crowdfunding raise on Seedrs in June 2020. This is where I discovered them. They have been slowly growing since then.

I made my first deposit of £100 in June 2020 and topped it up to £500 a few days later. Since then I have had a monthly standing order of £100 slowly building up my assets. The £100 leaves my bank and is immediately deployed when it arrives at ElfinMarket. The process is completely hands off.

When I originally wrote this analysis it was January 2021 and I had £1200 invested in their standard account. I wasn’t able to take advantage of the IFISA that year as I was already contributing to an IFISA with CrowdProperty. From April 2021 I closed my Standard account and Opened an IFISA account with them. I opened the account with £2000 and have been contributing £1000 per month ever since.

Earnings started in the IFISA in May 2021 and are paid around the middle of every month.

As you can see, the earnings are regular and steadily increasing as my assets under management increase. The monthly interest should pass the £100 in the next month or so. Moving forward I am going to invest my 2022-2023 IFISA in Elfin Market, the same as last year. That should bring my monthly income to around £200 by April 2023