The Anonymous Widower

What Do You Get When You Cross Zopa With Wonga?

At a first glance Zopa and Wonga are at the two ends of the financial spectrum, when it comes to borrowing and lending money.

Zopa, Funding Circle and Ratesetter, and probably a few other peer-to-peer lenders in the UK and around the rest of the world, take in money from those who want a bit more interest on their savings and lend it out to those who after a series of rigorous checks, look like they might be able to repay it.

I have seen figures which show that peer-to-peer lending grew by 300% in the last year and has now lent over half a billion pounds. So they must be doing something right! On a personal note, although my return has dropped a bit in the last year, I still get nearly five percent on my money invested in Zopa before tax, after taking into account all charges and bad debts.

Wonga and the other payday lenders probably lend a lot of their money to people who’d never qualify for a loan from Zopa and their peers. The interest rates are a lot higher and the terms are generally not as favourable as those offered by Zopa.

In some ways what unites Wonga and Zopa is their efficient systems, backed by state-of-the-art computing. Robert Peston talked about Wonga’s systems in this article.

eMoneyUnion is a new peer-to-peer lender, which could be thought as a company, that takes the best practice of Zopa and Wonga and combines them to create a company that can lend to those who wouldn’t get a Zopa loan, but also gives a good return to its investors. This article is about the launch of the company.

So it would appear that eMoneyUnion could be the cross between Zopa and Wonga!

Let’s hope it all works out well.  I shall be investing.

July 9, 2013 - Posted by AnonW | Business, Finance | Banks, Payday Loans, Peer-to-Peer Lending, Wonga, Zopa