Understanding risks

Please ensure you understand the risks involved before investing with Shojin. 

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Risk, returns and the role of FCA regulation

  • Shojin is regulated by the Financial Conduct Authority and conducts upfront due diligence, co-invests its own funds, and oversees the borrower throughout the period of the investment.
  • This is designed to reduce risk, but it is not a guarantee. Investing in Shojin projects carries an element of risk, and both the payment and timing of returns are dependent on the success and progress of the individual investment.
  • Any returns, including interest or dividend payments, are not guaranteed and may be less than expected or not be paid at all if the project does not go as planned.

Innovative finance ISA (IFISA)

  • Individuals in the UK can invest in peer-to-peer (P2P) loans, mini-bonds, crowdfunding and other alternative investments through an Innovative Finance ISA (IFISA). However, it is essential to bear in mind that returns are not guaranteed, and there is a risk of losing your investment. 
  • An IFISA simply means that any potential returns are tax-free, and as with any investment it is crucial that individuals do their own research and consider their financial goals, investment objectives, and attitude to risk before investing in an IFISA.
  • Investors should only invest an amount that they can afford to lose and should carefully read the terms and conditions of each investment opportunity before making a decision.

Contractual relationship and what happens if Shojin's wind-down arrangements are triggered

  • When investing via the Shojin portal, your contractual relationship is with the corporate entity set up for the project you invest in, not with Shojin itself. This structure ensures that funds are segregated from other investments on the platform and from Shojin corporate entities, this protects investors in the event Shojin goes out of business. 
  • If Shojin went out of business the company's wind-down arrangements would be triggered. These arrangements are designed to ensure that investors' investments will continue to proceed as anticipated, but expected returns are not guaranteed.

Liquidity of investments

  • Investments made via the Shojin platform are typically expected to be held for the full term of the investment. 
  • Although the investments can be listed on the Shojin secondary market, there is no guarantee that a buyer will be found, and you can't get your money back unless you manage to find a buyer for your investment on the secondary market.

Investment strategies and your attitude to risk

  • It is essential to spread risk by diversifying investments over a number of projects across different asset classes. Before investing, it is important to consider the potential impact of losing your investment and make sure that you only invest money that you can afford to lose. 
  • Shojin projects meet the investment objectives of achieving longer-term growth or income, as investors must wait until the projects have been fully completed. 
  • Investors need to be aware of their attitude to risk when making investments, and it is important to remember that taking risks with investments means accepting that you may lose your initial investment