Breaking news: Zopa withdraws from US market

After several hours speculation following an email sent to some US lenders of Zopa including the statement “In addition, the Zopa social networking Web site will no longer be available as of October 9, 2008″, the Zopa CFO (UK) has posted a clarifing statement on the Zopa discussion board.

The email from Affinity Plus is partially correct in that we are transferring our customers relationships to the credit union they either borrowed from or bought a CD from (invested in). We are NOT shutting the website today. As most of you know, Zopa’s US operation has a very different model to that in the UK and Italy in that it works in partnership with financial institutions (the credit unions) rather than being a pure peer to peer marketplace as it is here and in Italy. So while our model is doing very well in current market conditions, the US has been adversely affected in a way that couldn’t have been predicted when we launched and is no way the fault of our partners. For me, a real shame is that we weren’t able to launch the original model over there for regulatory reasons, esp given what a great job the regulators have turned out to have been doing there over the last few years, but that is another story….

The decision has not been taken lightly, and has obviously been difficult for our US colleagues, but due to the current credit crisis we have decided to withdraw from the US marketplace. This decision will have no impact on Zopa’s other activities in the UK, Italy and Asia. Zopa’s UK operation has experienced significant volume increases in 2008 with huge growth in new members and increasing lender returns, while continuing to maintain excellent credit quality – currently less than 0.5% of loans are affected by any kind of late payment issue, with actual losses below 0.04%. Zopa Italy has achieved the highest growth of any European peer-to-peer operation since its launch in January, and has recently launched the first secondary market for any peer-to-peer operation.

Zopa’s US customers’ deposit accounts continue to be insured by the NCUA up to $250,000, and servicing of those accounts as well as the loans will be assumed by the credit unions within 90 days.

The US website does not appear to have any statement regarding the changes.
Update: There is a blog entry on the Zopa blog now.

Requesting a Zopa (US) loan can harm your credit history

Tom of Prosper Lending Review found out that when he tried to request a Zopa loan not only was he rejected, but the Zopa credit inquiry was listed on his credit report. Unlike other p2p lending services in the US Zopa does a hard pull. The Zopa FAQ states:

We think it’s best if you assume that there will be an impact to your credit score. That means you should only get a quote if you really would be interested in a Zopa Loan.

Bad.

Loanio – more loan listings on first day

After the Loanio launch yesterday, already some more loan listings are up at Loanio.com. Right now I count 8 listings. Probably more are in the making. No bids yet, which is not surprising as the lenders have to sign up and transfer money to Loanio first.
Michael Solomon, the CEO and founder of Loanio had a lucky week according to the Loanio blog – not only did he launch Loanio, but he also won $1,000 in the New York State Lottery.

Continue reading

Loanio launch II

Last week I titled ‘Loanio Launch‘. That was a little premature (I was not the only one fooled by the site apparently going live – see Tom’s blog). Well today Loanio.com is really live. And there are 5 listings at the moment (see screenshot). For a list of features see the previous loanio coverage.

Loanio listings

Netbanker has a list of states (with max. interest rates), open to Loanio borrowers. You are welcome to discuss your thoughts on Loanio in Wiseclerk’s Loanio Forum.