Some of Europes largest online lenders have started to grapple with the idea of potentially becoming a bank; Funding Circle says it has no plans to do so, Zopa on the other hand says they are becoming a bank; other online lenders like YOUnited Credit in France and Raize in Portugal have thought about becoming a bank but thus far see the flexibility of not being a bank as an advantage; the banking market overall is going through quite the change and the definition of a bank is sure to be examined. Source.
Zopa, the industry's first P2P lender, has reached a new milestone, originating over 2 billion British pounds ($2.5 billion) in loans since 2005; according to Zopa the firm has originated 300,000 loans from 246,000 borrowers and has 75,000 investors; in the UK, Funding Circle is also close to reaching the 2 billion British pound mark with cumulative loan originations of 1.92 billion British pounds ($2.40 billion) since its launch in 2010. Source
The UK continues to be a trailblazer when it comes to p2p lending. Zopa, the market leader in the UK,...
The UK's oldest and biggest online lender will be cutting rates by 0.2% across all accounts for the third time in the last five months; Chief Product Officer Andrew Lawson told investors via email that since competitors have been cutting rates they also needed to continue their rate cuts and they could also see this trend continuing; left with a choice of cutting rates or lending to a risky borrower, Zopa opted to cut rates and keep their lending practices static. Source
Crowdfund Insider talked with Zopa about 2016 and 2017; the firm had a successful year in 2016 despite the industry's challenges; highlights from the year included lending over 680 million British pounds ($855.02 million) to nearly 100,000 customers, becoming profitable, securitizing its first loan portfolio and announcing plans to launch a bank; in 2017 the firm plans to build on its success while also beginning plans for launching a bank with deposit accounts and overdraft alternatives by 2018; in its core business products, Zopa CEO Jaidev Janardana says the firm will be looking for new partnerships that support its auto finance, point of sale and personal loan businesses. Source
Zopa, who specializes in unsecured consumer loans may be looking to expand into secured loans, specifically the auto segment; the company sees a healthy level of demand but a generally poor consumer experience; Zopa's Chief Marketing Officer Amy Miller stated, "People are getting poor deals in that area and end up paying significantly higher annual percentage rates than they would if they arranged their financing before going into a dealership."; the company is also reportedly considering other loan terms, such as 18 month loans as well as a balloon payment loan. Source
The marketplace lending industry's first peer-to-peer lender has created a waiting list for new investors and is currently only accepting funds from existing investors; the investor waiting list began on March 9 and follows the previous halting of new money from all investors on its platform in December; the waiting list is another effort to keep processing times down; demand for loans on the platform was higher in February as more investors identified the loan investments for their high yields among other regional alternatives; Zopa has reported plans for expansion to secured car loans and is also continuing with its plans for launching a digital bank. Source
Zopa has promised its investors it will speed up the time for selling loans on the platform after investors complained of loan sale times taking weeks; the platform has identified this as an issue, reporting in a blog post, "Recently, some of our processes have been running slower than normal, resulting in it taking longer for you to sell loans and access your money early."; Senior Developer Joe Hutchinson says the platform has been working to upgrade its technology with steady progress and it has more enhancements planned which will provide more capacity on the server improving performance significantly over the next few weeks. Source
Zopa's Jaidev Janardana spoke at AltFi Europe this week on the firm's plans for building a bank; he provides insight in a blog post; the bank will build on Zopa's successful track record in lending with new savings accounts and credit product but the firm will not offer a current account; the UK has been dominant in challenger bank development and the Zopa bank will provide UK customers with another alternative banking option which is currently in high demand in the region; the above chart highlights the competitive advantages Zopa has in the market. Source
Zopa launched its Plus product one year ago; the Plus product is the firm's highest risk and highest return offering; investors are reporting a 6% short-term return for the loan investments which fall in two additional risk categories: D and E; since introduced the platform has lent more than 100 million British pounds ($124 million) from approximately 9,000 investors. Source