Zopa

Working Paper of the Federal Reserve Bank San Francisco on P2P Lending

wiseclerk

The Federal Reserve Bank of San Francisco has just published a 19 page working paper by Ian J. Galloway on “Peer-to-Peer Lending and Community Development Finance“. It examines Kiva, Zopa, Prosper, MicroPlace and Lending Club.

Quote from the conclusion of the article:

While online platforms may never replace conventional lending institutions, such as banks, it is important that the community development finance industry be aware of this emerging technology. Moreover, P2P finance platforms will continue to evolve—allowing for third-party issued loan sales, for example—which may fundamentally alter the way credit is allocated in the future. In either case, the potential community development finance implications are too significant to ignore.

P2P Lending Companies Show Strong Growth – Aug. 09

wiseclerk 1 Comment

P2P lending services continue to grow. In some markets the speed of growth has even accelerated.

P2P-Banking.com has created the following overview table listing services in operation and ranked them by loan volume funded in the past 6 months.

This image may be reprinted on other internet sites, provided it is not altered or resized and the following text (including the direct link to this article) is given as source directly below the image:
Source: P2P-Banking.com

For some service like the Korean Moneyauction and Popfunding no figures were available. Also omitted are some services that did not reply to information requests.

Note that Prosper.com was closed for most of the observed time span and did not make the minimum cutoff for the table. Also note that Zopa Italy is currently closed.

For a table listing more p2p lending companies check previous ‘P2P Lending Companies by Loan Volume – Jan. 09‘.

Especially british Zopa and the German services show strong growth lately. Smava nearly doubled loan volume in July compared to June (chart), whereas Auxmoney tripled it (chart). At Smava currently even 25,000 Euro loans (approx. 35,750 US$) are funded with bids in only 4 minutes (!) bidding time (example loan).

On the other hand MYC4‘s growth slowed in the last months (chart) due to problems with the providers loan picks.

Licence of Zopa Italy Revoked

wiseclerk 3 Comments

Zopa.it has posted a message on their frontpage that the Bank of Italy has revoked the licence to act as a financial intermediary.

As a result Zopa Italy has currently stopped issuing new loans and accepting new lenders.

EDIT: Speculation – It may have to do with this order of the Bank of Italy, which came into effect on July, 1st limiting the max. allowable interest rates.

UPDATED July 14th – Information provided by Carlo Vitali, Zopa Italy:

I can assure you that the action of Bank of Italy has nothing to do with this order of the Bank of Italy. The document you refer to has quarterly releases and it simply states the average interest rates for various credit products and says that any interest rate higher than 1.5x the average is considered usury (and therefore is illegal).
Zopa has never quoted a single loan even close to usury rate and our average rates are really appreciated by borrowers being in average 9,6 APR against a 15% industry average.
Bank of Italy accuse us of operating banking activity without being a bank while we sustain that we are just intermediating payments between private lenders and borrowers. Accusation is based on the fact that we have a transit lender account, where the money stays for few days, maximum a couple of weeks, before going out in loans. On this account we don’t get any interest and is not part of the assets of Zopa Italia. Nevertheless we had proposed an operative solution to solve the issue and we hope we will get the chance to implement it and reassume the business. I remind you that we got an authorization from Bank of Italy before launching Zopa in Italy.

Thanks to Carlo Vitali, for providing P2P-Banking.com with this information on the status.

Zopa Partnerships Bring in New P2P Lending Borrowers

wiseclerk

British p2p lending company Zopa has recently entered two partnerships.

Zopa Prime

Zopa partners with the Charity PRIME to offer loans to entrepreneurs over 50 starting or running a business. The loan is not a loan to the business but a personal loan of up to 15,000 GBP (approx 24,125 US$). PRIME is the Prince’s Initiative for Mature Enterprise. The charity’s role is to vet the business plan of the applicant.

Lenders benefit because all Zopa prime loan listings are 50% guaranteed by PRIME. More details on how to obtain a loan.

Zopa and Good Energy

Zopa also partnered with Good Energy, a 100% renewable electricity supplier. Customers of Good Energy can use a Zopa loan listing to fund the initial installation cost of solar panels or wind turbines. In this partnership Zopa uses affiliate links with a branded landing page:
http://www.goodenergy.co.uk/affiliates/zopa

Benefits for Zopa from the partnerships are:

  1. More borrowers
  2. More quality without more costs – borrowers are vetted/screened by partners
  3. 50% of loan amount secured for PRIME loans
  4. Possibly earning referral fees from the affiliate link to Good Energy
  5. Great story for press coverage and marketing (catchwords:  “Prince Charles”, “renewable energy”, “credit crunch”, “older age”, …)

Continue reading →

Interest Free Loan

wiseclerk

The borrower who receives the 10,000th loan from Zopa UK will be lucky – it will be an interest free loan.

Furthermore Zopa has a referral promotion in July. Zopa pays 100 GBP (approx. 165 US$) to members that refer a borrower who successfully gets a loan in July.