Peer-to-peer (P2P) is all the rage, with companies like TransferWise now all but household names and the descriptively named Lending Club, the largest US P2P company, recently becoming the first to IPO.
What isn’t so well known is that Zopa, one of the peer-to-peer innovators, was founded in a barn, helping to spawn an industry worth $10bn (£6.6bn). It helps match people wanting to borrow with others wanting to lend, thus cutting the charges commonly levied by banks.
New data from Zopa can now give a fascinating insight into the P2P industry, 10 years after its conception.
Zopla, considered the oldest P2P company in the world, has now facilitated £750min loans in the UK, and expects to pass £1bn in the summer of 2015. In 2014 alone, £334m was lent, Zopa has returned a whopping £46m to customers in interest ove rthe 10 years,
Where do the loans go?
What’s most interesting is seeing how the reasons for people taking out loans have changed during those 10 years.
Cars and motorbikes are the reasons for 36 per cent of loans over the period, but the figure has fluctuated. In 2011 over half of the total number of loans were taken out to buy a motor, but the figure was only 33 per cent in 2008 as the recession hit.
Also high up was debt consolidation, while home improvements accounted for 22 per cent. Weddings, from a nadir of 1.2 per cent in 2008 have now all but doubled to 2.3 per cent.
What Zopa said
Giles Andrews, Zopa chief and co-founder, said:
It’s hard to believe that we’ve gone from an idea in a barn to a global industry now lending billions of pounds in the course of a decade. We created Zopa because we saw the potential to bring people together over the internet without having to go through a bank.This has prompted a revolution in the financial sector worldwide. We are very proud to have pioneered a new way to do finance by allowing people to achieve their life goals through lending or getting a loan at a great rate. I see Zopa becoming the norm in the same way EBay has.