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First Thoughts On Shojin Going Bust

By Neil Faulkner, 4thWay Head of Research on 4th April, 2026 | Read more by this author

An online direct lending platform called Shojin has gone bust, as it could no longer pay all its bills.

Its directors chose to place its business in administration. That means that specialists (called “administrators”) have been appointed to wind it down.

The administrators have stated that there are 16 property projects funded by lenders currently outstanding.

They have also said that some Shojin personnel will continue to run those loans and provide quarterly reports on their progress. The next report due out for all lenders will take place in April as usual.

4thWay's focus is P2P lending and other online direct lending, so it's the impact of the closure of Shojin's online lending platform that is the focus of this page. Anything else is outside 4thWay's remit. That means this page doesn't cover the impact on anyone who lent money to, or owned shares in, Shojin itself, or any of its related businesses.

What did 4thWay think about Shojin before it went bust?

Over the years, 4thWay users have written to us asking: “What do you think about Shojin?”

We don't think we're allowed to answer such questions, because we can too easily end up giving out personalised answers that are classed as financial advice. We're not allowed to do that.

So we simply respond by outlining any contact we've had with Shojin, how far that got, and then add what we already say a lot on our website.

For example, in one reply to a lender last year we stated that:

“Shojin has been in touch with us once or twice over the years to get listed, but they have never made it very far into our initial assessment. Really, until they go through a full assessment, we can't write up a report on them.”

4thWay had last been in touch with Shojin in 2023 in a brief call and exchange of emails.

We can't know if it was anxiety about our forensic approach to assessing them that put them off from taking it further. Or whether it was the huge time it would have taken to go through our assessment. Or whether they simply decided to try to succeed and grow without being transparent with 4thWay or other independent analysts.

In any event, there's no way we could have assessed the scale of the risks for lenders, or the risk-reward balance, without a lot of its data, documents and access to its key people.

As we have always explained: if you can't reasonably assess and measure the risk of any provider, then you can't judge whether lending your money through their online lending platform is potentially a sensible idea.

So, as usual, Shojin was simply unrated and not listed on 4thWay.

Its website didn't contain a great deal of information to help the public to have a go at their own assessments either.

For starters, I believe its public website was missing important information on the people – such as their backgrounds in credit risk – and I think it even had no statistics at all.

With that in mind, two of 4thWay’s 10 P2P Investing Principles, which have been the same since we started in 2014, are:

Principle One. If you have any doubt at all about lending through a specific P2P lending account or IFISA, the answer's “No”. Only lend when you're supremely confident you understand all the risks.

Principle Three. Treat buried information as if there's a reason, missing or ambiguous information as if it contains bad news, and decreased information as if it contains worse news. Demand more verifiable information the less that is provided freely.

On that basis, Shojin would probably have been an immediate “No” to many people following our principles.

What were Shojin's plans to protect you in the event of its failure?

Shojin never shared its wind-down plans with 4thWay.

The website's page on key risks doesn't even list its potential failure as one of them.

An FAQ on its website states simply this one paragraph about it:

“What happens if Shojin ceases to exist or falls into financial distress?

“Each property investment is ring-fenced from the assets and liabilities of Shojin as well as from all other property investments on the investor portal. As required by the FCA, Shojin has in place a Resolution Plan and wind-down arrangements to ensure that all ongoing projects are completed should Shojin fall into financial distress and not be able to continue in business.”

What has actually happened since it went bust two weeks ago?

It's early days, but how does that paragraph on its website stack up with the story so far?

Those actually lending their money have received a more detailed update, but here's a plain summary of the main elements for everyone else, along with a few comments of my own:

The administrators have stated they will first complete a review of Shojin, the property security and how it's legally structured. So, if Shojin has set everything up correctly, this review should reveal to them that lenders through its platform are the ones who have the direct benefit of the property that the borrowers have put up as security.

The administrators will also try and stabilise the situation as best as possible. This will likely involve cutting all unnecessary costs for winding down the business, and talking to those banks and other businesses that Shojin might be struggling to pay.

They intend to keep key Shojin personnel on to assist them. That the administrators – at least for the moment – appear both willing and able to keep key people on is one of the most promising things it has shared with lenders. It gives some early hope that the wind-down could be relatively smooth and low-cost for lenders.

The loans are ongoing. The Shojin personnel who were in charge of each one will continue to run them and they will keep providing quarterly reports on the property projects' progress. This is also a positive signal.

The administrators have put a mechanism in place to ensure that lenders using Shojin's IFISA won't lose their ISA allowances – and therefore their tax advantages.

Lenders are still able to withdraw their cash from their Shojin accounts in the normal way, without restriction.

Shojin's lenders have never been able to sell their loans early – before borrowers repay naturally. So the administrators haven't covered that.

However, experience shows that lenders in bust platforms should be prepared for a longer wait than usual for all the outstanding loans to be repaid or written off. If all goes well, the lenders will earn interest for the entire time that their money is locked into the loans.

My thoughts now

It's very early days with not much to go on – here from the outside.

My colleagues and I have never had an opportunity to see how good Shojin's loans were. Nor have we ever had the chance to try to investigate whether it had been pushing problem loans down the road until a large pothole consumes them.

But, all in all, this is probably just about the most promising start that you could hope for when a provider goes bust.