Peer-to-peer lender Zopa has announced a ‘first of its kind in the UK’ partnership with Metro Bank which indicates confidence in the market...
Zopa says it’s a clear signal that some parts of the UK banking sector are embracing P2P lending as a new asset class.
CEO and Zopa co-founder Giles Andrews called it another milestone for the industry which brought together “two key challengers to the traditional financial services landscape and signals our intent to become a mainstream service.”
Giles believes the new partnership will prove that Zopa is a trusted platform “not only for consumers but also for institutions to deploy their funds.”
Development finance specialists Regentsmead already has an established partnership with Metro Bank and referred to the bank as a “great brand” with which to be associated.
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♦ U.S. banks have been getting into the peer-to-peer lending investment game in one form or another much more than their U.K. counterparts. Now that Metro Bank has teamed up with Zopa to fund loans, we are likely to see others follow suit. But many probably won't. The next point will explain why...
♦ The most fascinating part of the article for me was to read the critical and negative statements from some of the high street bankers and pundits. Many don't seem impressed by the surging p2p lending sector one bit. Bridgebank Capital’s MD Laurence Goodman called peer-to-peer lending “an accident waiting to happen” adding it was going to be “the next major regulatory investigation, it’s got short shelf-life and it will be closed down.”
Director of MT Finance, Joshua Elash, director of MT Finance said that peer-to-peer lenders ran the danger of becoming "the garbage men of the lending industry". Why?
Because the borrowers rejected by high street banks still hold the possibility of getting their loans funded through p2p lenders. So it seems that if the high street banks say you don't deserve a loan, everyone should say the same, or be deemed the garbage men of the industry. That's not AT ALL an arrogant premise (pure sarcasm).
♦ On the other end of the spectrum, Metro Bank CEO Craig Donaldson seems to understand the reason for growth in the peer-to-peer lending sector. In a word.... culture. He refers to it in his statement when he says “The partnership we have with Zopa is a cultural fit that works perfectly with our commitment to providing a convenient and customer-focused banking experience and we look forward to working with them closely.”
Yes, the very culture is changing. Young business people, students and borrowers don't see the banks as the money gods they see themselves as, the banks are an option. Nothing more, nothing less. If they don't want to fund a small business with potential, someone else will. Borrowers can now turn to other real people that don't only see cold numbers, but numbers with a person and dream attached. The culture is changing, those that don't like it will have to deal with it and realize that they no longer have the final say. Peer-to-peer lending is here for the long term.