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.
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.
If Bankia Were a Used Car, It Would be a “Cut and Shut”
The heading of this post has just been said by BBC financial correspondent on the BBC Radio 5. I like it. He also said that Bankia needs €19billion immediately and the Spanish banks together need €100billion.
I would move everything out of Santander now, as when this Spanish idiocy goes bang, it will be very difficult, as those left in this game of Spanish musical chairs will be exiting at the same time.
But of course banking with a company headquartered outside the UK, breaks one of my golden rules of banking. Or in fact my late friend’s rules.
Should We All Pay Bank Charges?
The UK is one of few countries in the world, Australia and India are others, where if you keep your account in credit, you effectively get free banking. There is an article in the Telegraph, describing how Andrew Bailey of the Bank of England feels this banking model should end, as it encourages things like mis-selling to get the money in other ways.
I always remember my friend, David, who rose to be Buisiness Banking Director of a major clearing bank, said that they made a third of their profits, by lending money overnight.
Now I want with a bank that doesn’t apply charges for direct debits and transfers, keeping most of my money in Zopa. In other words, I own the overnight money at a better rate than my bank will give me.
The banks are going to hell, and I’ll make sure, that I’m not in their handcart
Ivan Massow Joins Peer-to-Peer Lending
Peer-to-peer lending is growing fast, with new companies starting up seemingly every week.
Now entrepreneur, Ivan Massow has joined the party with a company called Massow’s Angels.
This was reported in the Independent yesterday, under a title of How Peers Can Solve Borrowing Headaches.
This is part of the report.
Funding Circle recently reported that its customers invested £6.1m in the first two months of this year and the total amount saved and borrowed at Zopa, the UK’s first peer-to-peer website, passed the £200m mark last week. Such growth prompted Andy Haldane, the head of policy at the Bank of England, to say that such peer-to-peer lenders could ultimately replace high street banks.
As if the banks hadn’t got enough problems.
Note that the Indie talks about the Peer-to-Peer Finance Association, which is a trade body created to ensure standards in the industry.
I have lent money through Zopa for several years now and get a reasonable return. In some ways though, my guarantee is in the figures, that I track every day in a spreadsheet and the fact that the company is totally open about the processes it uses. The processes must work, as at the end of May 2011, I’d earned 6 % since the start of that year. The figure is now 9.3 % for 2012, with ten days to go of the month of May.
Spanish Banks Get a Downgrade
It is being reported that Moody’s have downgraded the ratings they give to Spanish banks.
My late great friend, David, who rose to the top of a major clearing bank, had some rules about the bank you used.
One was never put your money in a bank, with its headquarters outside of the UK. He said, you haven’t got the same protection.
Breaking The 9 % Barrier
This morning, I found that my investment in Zopa has now paid 9 % since the start of the year. The actual figure is 9.04 %, but of course this is before tax, although it does include bad debts and all charges.
I think this is because a lot of older loans from 2009 and 2010 have now been fully paid and these have been replaced with ones that have a higher interest rate from the past year or so.
I think too, that good, high quality borrowers are looking at Zopa rather than the banks, which are much more expensive and have onerous terms and conditions.
It may be too, that Zopa are getting their checks better. Bad debts from various years are as follows 2008 (3), 2009(5), 2010(5). 2008 is probably low, as most loans from that year are now paid up.
The Anonymous Widower 