The Simon Gompertz Effect
Yesterday, the BBC published a well-researched article on its web site, by its Personal Finance Correspondent, Simon Gompertz, about peer-to-peer lending. I commented on it here.
It was the only article on the subject picked up by Google yesterday and featured on the BBC’s most read list of articles on its web site for most of the day.
As a member of Zopa, I follow their figures closely, which are easily accessible to any borrower or lender. The amount of money that lenders have demanded from the site has risen significantly.
At 09:00 on Saturday, the money demanded by prospective borrowers was £9.4million, whereas at the same time today the figure was £14million. Over the same period, the amount of money made available by lenders was £18.2million on Saturday and £12.1 today.
Doing a crude calculation means that £6.1million of lenders money has been allocated to borrowers and there are another £5million or so that could be lent. Zopa’s team of credit experts will be kept busy on Monday, checking all these new borrowers. And probably rustling up some more funds to lend.
Is this all the effect of one well-written article by Simon Gompertz on the BBC?
There’s another good article in the Observer today. I suspect that Zopa’s figures will be just as interesting tomorrow.
Update on 11th June 2012 at 08:00
Total demand is now £15.8million up and funds available are £11million. This works out as a swing of £13.6million over the weekend.
It did look at a few other weekends and typically, there is a swing between £2.5million and £4.5million.
Whatever the truth is, something extraordinary happened! And it is all good! Unless of course you’re a banker!
BBC Discusses Peer-to-Peer Networking
It does at last seem that personal finance correspondents like the BBC’s Simon Gompertz, are getting the hang and idea of peer-to-peer lending. He has just written this article about it. Here’s the first three paragraphs of the piece.
Lending via three websites that link savers with borrowers – bypassing the banking system – has topped £250m.
The “new age” finance carries no protection for deposits, but is being tipped as a serious threat to traditional banks.
The peer-to-peer sites are led by Zopa, which has lent more than £200m since it started in 2005.
I’ve been using Zopa since 2008 and would say that anybody who uses the Internet competently, has a basic knowledge of finance and is prepared to research how they handle their money, should consider Zopa or one of its competitors. So if you can’t be bothered to read Simon Gompertz’s article, then peer-to-peer lending is not for you.
On the other side of the coin, if you have a good credit record and need to borrow a few thousand pounds for say a new car or a house extension, get a quote from one of peer-to-peer lenders and compare it with what your bank offers.
Always ask a lender what happens, if I want to settle up early. Many lenders make their money by imposing extra charges at this point.
Wonga Bad, Zopa Good?
This question was asked in an article in Finextra.
It’s a good read.
One thing Zopa has proved, is that when dealing with finance, you can work a sort of co-operative or Big-Society idea, using the standard techniques of the Internet. So in some ways the good thing about Zopa, is the way it has created a comunity around its business, which educates and then brings people to that business.
Lloyds Unloads Bad Loans
It is reported that Lloyds Banking Group has unloaded £809 million worth of bad Australian loans for £388 million.
That looks like bad business to me. Did they claw back the bonuses of the twits that signed off that rubbish in the first place?
The Sun Discusses Zopa
I was a bit surprised at this story about peer-to-peer lending that appeared in The Sun.
It is a fair factual article, which should make readers think about what they should do with their money.
The Dates Muck Up Zopa Returns
Some weeks ago, I said that my Zopa return since the beginning of the year was over 9 %. It’s now dropped to 8.73 %.
It’s nothing to worry about, as the large payments made on the first of the month, are stuck in the system, due to the four day weekend.
Wonga Might Float in the US for $1.46billion
According to this report in the Telegraph, legalised loan shark, Wonga may float in the US for $1.46billion. Here’s the first paragraph.
The controversial company, criticised by the Office of Fair Trading and shadow business secretary Chuka Umunna, has discussed with investment banks the prospect of a float on the Nasdaq or New York Stock Exchange.
This company and the possible float, shows two of the worst faces of banking.
Let’s hope all the publicity, gets the government to do something about companies like this.
A Pair of Wongas
Wonga is now targetting the business market.
A Pair of Wongas
Did they give the drivers a bonus to be in convoy?
Paying by Phone
They are discussing this on BBC Breakfast this morning.
It won’t work for me, as I use a 12 year old Nokia 6310i. In fact, I’m now going the other way, taking just one credit card, my camera and my Freedom Pass with me, when I go travelling or shopping in London. I sometimes leave the phone at home anyway, as when I’m in the Underground, there is no signal.
Pasty Tax
As a coeliac, I can’t eat pasties and most takeaway food, so the pasty-tax was for me creating a level playing field in taxation.
It just shows how the country wants to eat themselves to hell and then travel there in a dump truck.
The Anonymous Widower 