Zopa
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| Ltd. | |
| Industry | Peer-to-peer lending |
| Founded | March 2005 |
| Founders | Giles Andrews (CEO) James Alexander Richard Duvall David Nicholson Tim Parlett |
| Headquarters | Cottons Centre, Tooley Street, London, England, UK |
| Products | P2P lending |
| Website | www |
Zopa is a UK online personal finance peer-to-peer lending company founded in 2005. In 2012 the New York Times reported that Zopa was "one of the world’s first Web sites that aims to directly bring together borrowers and savers, cutting out financial institutions from the lending process."
Zopa was founded in Buckinghamshire in 2004 by a team from the internet banking company Egg Banking, and originated its first loan in 2005. It was the first peer-to-peer lending company and one of the earliest fintech firms.
The New York Times reported "amid the economic slump" due to the financial crisis of 2007–2008 Zopa "abandoned its own costly push into the United States."
In September 2016, the first portfolio of Zopa loans was securitised on the European markets.
In November 2016, Zopa announced that it would apply for a banking license.
Zopa enables investors to lend to UK consumers directly through its peer-to-peer lending platform.
Borrowers can take out loans between £500 and £25,000. Typically individuals use these to funds to help buy a car, consolidate debts, cover home improvements or weddings. All applicants are credit-checked by Zopa.
Investors’ money enters a queue to be lent in one of three products, which vary according to the risk, returns and accessibility they offer. Once the money reaches the front of the queue, it is split into micro-loans that go to multiple borrowers. Investors then receive monthly repayments of interest and capital, which they can relend to compound the interest.
In 2005 the BBC reported that "customers borrow at the interest rate that suits them, based on their personal credit rating. In addition, they must pay a one-off fee equivalent to 1% of the loan they take out." Further Zopa sells "loan payment protection insurance to borrowers" and Zopa does not charge lenders a fee to use the exchange.
In May 2013 Zopa introduced its Safeguard Fund, which covers investors’ losses if a borrower defaults. This was because peer-to-peer investors could then not offset their losses against tax.
The Safeguard Fund has paid out all losses to date, but there is no guarantee it will do in the future.
In November 2016 Zopa announced its intention to apply for a banking license so it could expand the range of financial products it offers to UK consumers
Zopa’s bank is scheduled to launch in 2018 and will sit alongside the peer-to-peer lending business. At launch, Zopa plans to offer FSCS protected deposit accounts to savers and overdraft alternatives to borrowers.
Zopa operates only in the United Kingdom.
The New York Times reported in 2006 that then Zopa CEO Richard Duvall announced that Zopa "planned to start a site in the United States to compete with Prosper this year." In 2008 the New York Times reported that Zopa had withdrawn from the United States "citing adverse market conditions, and two San Francisco-area companies, Lending Club and Prosper, have encountered problems with securities regulators and were forced to stop all trading on their sites."
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Wikipedia