I Get Two Possible Christmas Day Lenders On Zopa
My lending pot is empty, but today, I did get two new lenders, who are wanting to borrow money on Zopa. Obviously, they may not pass the credit checks, but they did apply on Christmas Day.
One canny Scot got an offer to borrow £5,000 at 5.8% and an East Ender got one to borrow £1,200 at 6.1%. Both were considered to be A* or the most highly-rated borrowers.
Julian Knight Hits Two Targets With One Stone
I have a trawl looking for peer-to-peer lending stories and it picked up this article in the Independent by Julian Knight.
He starts by giving an excellent review of peer-to-peer lending and the broadening of financial services in general, saying it is broader in the United States. He concludes by saying.
This, I’d argue, is one of the reasons why in the US they are more entrepreneurial and start-ups get a chance to, well, start up.
He then goes on to talk about some of my least favourite people; chuggers. This his concluding paragraph.
The town of Shrewsbury blazed a trail by banning these individuals last year and now we seem finally to be consigning chuggers to the same place as the likes of the squeegee merchants.
Incidentally, a chugger at the Angel last week, virtually chased me into the road. If there’d been a policeman about, I’d have made a complaint. On the other hand, life is too short.
I shall follow Julian in future.
I’ve Missed An Opportunity With Zopa
As I always do, I just checked my Zopa statistics this morning. Not that anything untoward or otherwise happens on a Sunday!
I like analysing statistics and it would ave been great fun to see if anybody apply for any loans over the holiday.
But at present, I’ve only got the princely sum of £0.39 available. So I won’t be able to collect any data.
I bet though, if you apply for a loan to Wonga on Christmas day, you’ll get a loan!
I’ve just looked back at my Zopa data for Christmas 2011 and it would appear that I did make a loan on Christmas Day. Obviously, it wasn’t processed until a few days later.
But why shouldn’t you apply for a loan on Christmas Day from a reputable lender? After all, the computers on which you perform your application never sleep. Or aren’t supposed to!
Andrew Haldane On Peer-to-Peer Lending
This quote from Andy Haldane, a director of the Bank of England in the Independent is very ominous, if you’re a banker.
The mono-banking culture is on its way out. Instead, we are seeing a much more diverse eco-system emerging with the growth of new non-bank groups offering peer-to peer lending and crowd-funding.
Few are going to be upset, if more bankers are out of a job.
Zopa And Funding Circle Get Government Funding
The Daily Telegraph is reporting that Zopa and Funding Circle are going to get tranches of funds to invest from the Government.
I very much applaud this move as although the sums are quite small at ten and twenty million pounds respectively for each, the government’s seal of approval can only help the growth of this form of lending. To put these sums in context, Zopa has lent over a quarter of a billion pounds and currently around thirty million is available to borrowers.
But surely the biggest boost is that with this extra funding, the publicity will drive more credit-worthy borrowers into the arms of Zopa and Funding Circle.
My only worry is a selfish one, that the interest rates available will drop because of the extra funds.
I certainly wouldn’t like to be holding any shares in a traditional bank.
I shall also be watching the return, that I’m getting on my money in Zopa.
Zopa Hits A Quarter Of A Billion
Zopa are reporting on their web site, that they have now lent out over a quarter of a billion pounds. That may seem a lot of money, but consider that ING have pulled four times that amount out of lending in the UK in this year alone. But every little helps.
You can make an estimate of Zopa’s income, by starting with one per cent charged on all loans. So that looks like £2,500,000. And to that you can add about a £100 for each successful loan.
But this is probably a lot less than Barclays or another big bank, would make by lending a quarter of a billion.
So possibly Zopa is really only an irritant in the hide of the big banks.
On the other hand, Zopa is a company that lives without the cost structure that any bank feels it must have.
So if they ignore Zopa, the banks will live to regret it. But they won’t live very long in their current bloated and top-heavy forms.
The reason is simple. Zopa’s financial model appeals to both lenders and borrowers and is very simple. So all the discontent, that many feel about the banks, has found a home.
My only worry about Zopa is that politicians legislate against social lending to protect their shareholdings in LloydsTSB and RBS.
Zopa Start Processing Early
I check my Zopa account every morning when I get up.
At 6:30 this morning, I had £121.91 on offer, with 27 offers totally £2630 being processed.
Now at 7:30, it’s £221.91 and 26 (£2530)
So someone has already said, that a proposed loan shouldn’t be approved.
Zopa’s Bad Debts
I watch the bad debts I accumulate on Zopa very carefully.
At the end of 2011, I had 11 bad contracts, who owed me a total of 408.24 on a sum invested of about £40,000. That’s just under one percent.
Not quite a year later, I have 17 bad contracts, owing £428.39. But my book has grown to just under £90,000. That’s now less than half of one percent.
I do suspect this reduction is due to Zopa’s checking of clients getting better as the year’s roll on. In fact, of the 17 contracts in default, 3 date from 2008, 8 from 2009, 6 from 2010 and none from the last two years.
But also two of my older bad debts have been paid off. Does this mean that Zopa has a good collection system or do people want to protect their credit ratings? It could be a bit of both. Sadly someone could have died and probate has come through.
The Anonymous Widower 