ONLINE peer-to-peer lender Zopa has smashed past the £100m arranged loans mark as demand for alternative banking surges.
The bank says the success of its model, where individual lenders and borrowers agree their own terms, is partly a reflection of low interest rates. Chief executive Giles Andrews told City A.M. he expects the firm to rapidly increase its share of the UK lending market from one per cent over the next few years.
He said: “There is no reason we can’t have 10 or 20 per cent of the market. There are far more people wanting to borrow than there are lenders.
“We have the best performing loan book in the UK, better than the high street banks with a default rate of just 0.7 per cent. Zopa provides hard evidence that person-to-person lending works and can be hugely beneficial for both borrowers and lenders.
“Both groups have enjoyed a far better deal than the banks offer. Given the banks show no sign of reducing the huge spreads they charge between borrowing and lending, we are sure this growth will continue.”