Peer-to-peer lender Zopa has announced a partnership with challenger bank, Metro Bank, to lend funds through Zopa’s online marketplace.
Metro Bank has already begun lending funds to Zopa’s consumer borrowers.
By lending through Zopa’s platform which has over a decade of lending experience, Metro Bank will be helping UK consumers get a loan to finance a car, home improvement or consolidate existing debts such as expensive credit card debt, and in turn generate a decent rate of return.
Giles Andrews, CEO and co-founder of Zopa, said: “This is another milestone for Zopa and the P2P industry as this partnership brings together two key challengers to the traditional financial services landscape and signals our intent to become a mainstream service. Partnering with Metro Bank is an exciting move for Zopa as I believe both companies share the same values in providing exceptional customer service but through different channels.”
“This unique partnership is the first of its kind in the retail banking sector and a clear sign that Zopa is a trusted platform not only for consumers but also for institutions to deploy their funds. We’re delighted that Metro Bank is lending through Zopa and we look forward to working even closer with Metro Bank on future opportunities and products.”
Craig Donaldson, CEO at Metro Bank, said: “At Metro Bank we’re committed to revolutionising UK banking and we’re delighted to have partnered with Zopa, a fellow financial challenger. We are continually looking to work with partners that can benefit our customers and Zopa are the perfect players in the P2P space to help us lend funds to consumers.
“The partnership we have with Zopa is a cultural fit that works perfectly with our commitment to providing a convenient and customer-focused banking experience and we look forward to working with them closely.”
David Mann, head of money at uSwitch.com, said: “This could be a win win – Metro Bank could benefit from the traditionally high returns peer-to-peer lending can offer and there will be more cash in the pot for borrowers. For those locked out of loans from the traditional ‘Big Four’ banks, peer-to-peer lending can offer a much needed alternative, preventing them from resorting to payday loans.
“Seeing a challenger bank invest may also allay some of the fears people have and be a green light for anyone looking to boost their savings by investing their money into peer-to-peer lending. For despondent savers allowing their money to languish in low earning savings accounts and ISAs, a return of up to 5% with these schemes could be an attractive proposition.
“Would-be investors have historically been cautious of using a peer-to-peer lender, in part due to a lack of FCA regulation. Although they are now regulated by the FCA, as with all investments your capital is not protected by the FSCS and is at risk. Other saving opportunities, such as current accounts, still offer some attractive interest rates, and may prove to be the last obstacle before peer-to-peer can truly hit the mainstream.”
