Zopa Ends P2P, Buys back P2P Loan Portfolio

British Zopa announced it will close the p2p lending operation for retail investments. After 16 years the pioneer of p2p lending says they deliberated several options for how to close the P2P side of the business in a way that delivers the best outcome for their customers. After careful consideration, they have decided that the best way forward is the sale of all retail investor portfolios at full value. This will lock in the interest earned by investors so far and ensure the timely return of their money. Zopa Bank will be buying the P2P loan portfolio and P2P customers will receive their investment balances back by the end of January.

Zopa says ‘over the last few years, customer trust in P2P investing has been damaged by?a small number?of?businesses?whose approach led to material losses for retail investors. Linked to this, the changing regulation which followed raised the operational costs of running a P2P business, as well as the cost of attracting new investors to the Zopa platform. To offset these increased costs and ensure we have a sustainable and profitable business, we’d need to reduce investor returns to a point where they’d no longer be attractive and commensurate with the risk that investors take on.’

The last step: ‘By 31 January 2022 our investors will receive the full value of their invested balances in their Zopa holding accounts. This means that no investor will miss out on any of the interest they’ve already built up. There will be no impact on borrowers as Zopa Bank already services them and their loans will continue unimpacted.’

Zopa has lent over 6 billion GBP in p2p lending loans. In 2016 it applied for a banking license which it received in 2019.

Several other UK p2p lending companies took similar steps earlier and closed their platforms for retail investors and focussed on institutinal investors.

International P2P Lending Volumes December 2021
International P2P Lending Volumes November 2021
UK, Zopa

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