New figures have revealed that £125 million has been lent through peer-to-peer borrowing site Zopa in the last year.
This is an increase of 80 per cent on the previous year when £70 million was lent. The figures were released to mark Zopa’s sixth birthday. The company reports that lending through its person-to-person marketplace is growing by almost £5 million a month. The company now has a two per cent share of the UK personal loan market.
Through Zopa, people can lend money to other borrowers at rates they agree between themselves. The idea is that the system is fairer for both borrowers and lenders. The company says that through Zopa most people can access loans 20 per cent cheaper than the rates they would typically be offered by banks. At the same time, lenders should get more of a return on their money than they would if they put it in a standard savings account, with the average return for lenders being 7.6 per cent pa.
Giles Andrews, co-founder and CEO of Zopa said, “With banks continuing to inflict enormous spreads across their saving and borrowing rates, resisting pressure to better serve the country and being accused by the Bank of England Governor of routinely ripping off their customers - and all despite some of the biggest being bailed out by the taxpayer - it is perhaps not surprising that as more people hear about the person-to-person alternative, they are flocking to Zopa.
"Cutting out the banks is not only satisfying, these people are also enjoying much better rates on loans and on their savings by doing so," he added.
