P2P-Banking.com

Zopa reached 25 million pounds in loans. Zopa states cash depositers received an average 8.3% return after charges at a default rate of 0.04 percent. (Sources: Zopa, Financial Times)

Following through on the announcement (read: Zopa UK plans Young Market to target young borrower) Zopa has launched this market segment. Zopa says, it will help young adults, aged 20 to 25 obtain a loan, which otherwise would have difficulties - not because they have a bad credit history but because they have little or no credit history.

Zopa lenders can choose to make offers to these young applicants, with the added attraction of being able to charge a higher rate of interest because of the higher risk that these as yet unproven younger borrowers represent. So whereas the safest borrowers coming to Zopa can typically get a 5000 GBP loan over 3 years at around 8.5%, Young Market borrowers will be able to get the same loan at around 12.5%.

Zopa UK has announced that it will remove the options to lend for 12, 24 or 48 months and concentrate on lending terms of 36 and 60 months. The changes apply only to money lend through Zopa markets not to Zopa listings.

Why are we making these changes?
- Since Zopa began more than three years ago, more than 95% of your loans have been taken for a period of 3 years or less.
- The popularity of larger loans repaid over 5 years is increasing, particularly since we introduced the new fixed borrower fee.
- Almost half of our new lenders who sign up to Zopa do not become active and our hypothesis is that it is just too time consuming for them to make offers to all of our markets.
- This allows us to simplify the marketplace considerably, while still allowing borrowers to repay their loan early with no penalty.
- Because listings still enables all loan terms from 1 to 5 years, Zopa will continue to offer a wide variety of borrowing and lending options.
- By structuring repayments over at least 36 months, we aim to encourage fewer borrowers to repay their loan early, maximising the interest you earn from each loan and reducing the period your money might spend in your holding account. This is because the loans that have been repaid early to date were mostly taken for 12 and 24 months in the first instance, so that borrowers had paid back a good proportion of their loan after just a few months.
- We’re not envisaging that there will be any significant financial impact for Zopa from these changes. At most, we would earn 0.5% of the outstanding capital for a little longer if we can dissuade early repayment, but since we would hope that lenders would relend any funds repaid early anyway, we’re unlikely to earn anything more significant. These changes are purely aimed at simplifying our offer.

Lender reactions in the forums (19 pages of comments) are mostly negative.
Some lenders speculate that this move is a necessary result of the new flat fee which was introduced earlier. Borrowers pay 94.25 GBP of the loan amount. For short term loans the impact of this fee on the APR is higher then for long term loans. 

As there is no Zopa loan statistics site, it is not possible to track the Zopa growth daily. You have to wait for the instances where Zopa announces milestones.

Today Zopa - in an announcement to celebrate it's third birthday, said:

Since we launched in March 2005, £20 million in unsecured personal loans have been arranged at Zopa in the UK. More recently growth has been boosted by the global credit crunch which is driving unprecedented demand for P2P personal loans as banks become less competitive and tighten their lending criteria. All of this has also pushed up returns to Zopa lenders to an all time high.

At the current exchange rate that is approx. 40 million US$.

P2P lending service Zopa - already present in the US, the UK and Italy announced it will launch in Japan.

Zopa Japan will be led by Chairman Takashi Yoneda and Managing Director Tatsuya Kuboi, both highly experienced and distinguished technology-based financial services professionals. Zopa Japan further strengthens Zopa´s position as the leader in its field. Zopa will continue its track record of firsts, as it will be the first social finance offering in Japan.

Takashi Yoneda, Zopa Japan´s Chairman, says: "We are very pleased to be part of the expanding Zopa worldwide operations, and we look forward to offering innovative financial solutions for the Japanese market. We will draw from the Zopa´s experience across the globe and introduce a social lending platform that is tailored for the Japanese culture and regulatory environment

Zopa tomorrow celebrates it's third birthday - it launched in March 2005 in the UK market. 

Other sources: Techcrunch UK

According to the Wall Street Journal p2p lending service Zopa will launch in the US next week. Zopa has been established in the UK since 2005. The long announced US start had been postponed several times due to regulation issues.

In the US Zopa will partner with six credit unions. Lenders will benefit since they can be sure to get their principal back - deposits are insured up to $100,000 per member. This is new for p2p lending, where lenders usually carry the default risk (only Dutch p2p lending service Boober.nl guarantees for certain credit grades the bulk of the pricipal via insurance against default.
According to the WSJ article neither lenders nor borrowers will have to pay fees to use Zopa but have to sign up with one of the six participating credit unions.

An article on Netbanker.com already spoke of congestion, since Globefunder and Loanio will launch at a later stage and Prosper, Lending Club and Virgin Money are active in the market.

What's your opinion on this? Post your thoughts in the wiseclerk forum!

Lenders at Zopa do not (yet) select an individual borrower but rather select a market and a rate at which they want to lend their money. This is matched to borrower demand and if a match is found, money is lend out.

There is a 3rd party site tracking the development of the Zopa demand volume and charting it (daily, weekly, monthly, yearly). Recently the amount requested has gone down in most markets.

(Source)

Tuesday I wrote about Zopa's plans for Zopa listings. Now a preview of how the new Zopa listings will look is available. With this feature Zopa will take the step from anonymous borrowers to a more personal look with borrower listings and profiles. To create a listing borrowers will have a credit grade of at least C.

I looked at the preview today and found the resemblance to Prosper.com layout striking in many points. The listing overview will look like this:

The loan listing itself has photos, a loan details section, a personal profile section and borrower information. Furthermore it will have a Questions and Answers Section allowing the lender to ask questions. Looking at the following example the forecast graph in the upper right looks exactly like the same feature Prosper offers:

The 8 page preview description gives more example screens of Zopa listings, which Zopa says it will introduce within the next months.

Lender feedback (which is limited so far) has been mixed.

With this changes, should the Prosper & Zopa merger that Jeff & Heather wish (it is really only wishful thinking!) ever happen, then at least the layout question seems decided now.

"Prosper on Zopa" - "but better"

That is how the new Sales & Product manager Tanya Cordrey of Zopa described the planned Zopa Listings yesterday in a Zopa Chat. Quote: "It is the ability for borrowers to post listings and it gives lenders the opportunity to lend choose individuals"
Zopa plans to get this feature live next month.

The question about the chance for a secondary market was answered by that there is not enough volume yet (maybe next year). The chat was attended by many Zopa employees including the CEO. The transcript is available.

Today I will take a look at the communication approaches of Prosper, Lendingclub, Zopa and Smava. Since it is hard to judge the individual customer support these companies offer, the focus of this post is on the mass communication channels. To communicate their services to the lenders and borrowers the services can use the website's FAQ/tutorials, a forum, blog(s) and newsletter(s).

Prosper.com
Prosper has very detailed FAQs, which leave no aspect open. There are tutorials, videos and webinars. The Prosper forums are very active. While Prosper announce changes to the service in detail (here), the policy usually seems not to comment on individual users questions (except for the bug report section). Prosper seems to rely on users to communicate and educate each other in the forums. There has been criticism about censorship and deleted posts in the forums which led some users to set up an prosper independent forum.
As far as I can tell Prosper has no blog of its own, but there is a personal blog of the CTO John Witchel. But it is not very active and will probably not be found by the average Prosper user.

Zopa
The Zopa FAQs are detailed, too. The Zopa Forum is quite active with Zopa staff members responding to posts and questions. Zopa has a company blog which has a leisurely tone and often is offtopic. In my opinion it could get more informative for lenders or borrowers.
The same applies to the newsletters Zopa sends out.

Smava
Smava maintains a very detailed and good FAQ. The Smava forum is pretty quite, but Smava staff usually is responsive to user questions. There is no blog. Smava is only 3 month old and so far there have been only 2 or 3 newsletters, which were mainly a summary of developments.

Lendingclub
Lendingclub communicates very different from the others. Mainly it relies on it's blog which is in fact directly on the Lendingclub.com homepage. The blog is very active with up to 2 or 3 posts per day. Not only does it explain details of the lendingclub service but also has general advice on personal finance, e.g. on obtaining and maintaining good credit. Lendingclub has lots of guest authors contributing to the blog. The FAQ are somewhat hidden and only available to logged in users (unless you know the direct link). The information, when located, is detailed (e.g. states). As far as I am aware there is no Lendingclub forum.

My impression is that Prosper and Smava communicate in a style that appears more corporate and 'old fashioned' always pondering what information can be released and what for. Prosper has occasionaly received rather aggresive feedback of users, citing them of being non-responsive to the wishes of their users.  Zopa has a more buddying tone - hey take it easy. Lendingclub sounds educational to borrowers, aiming to help them by supplying them information. On the other hand Lendingclub's approach seems a little marketing driven, because their approach gains them search engine and blog visibility.