There has been a wide array of intriguing stories coming out of the Credit Crisis and I thought I’d share one which has more than a little irony…
Our biggest competitor – the banking industry – has just delivered the biggest boost to the Zopa business to date.
Yup, the very people we are trying to cut out to offer borrowers and lenders a better deal have been very busy driving both to us in record numbers.
The banks’ overzealous drive to expose themselves to debt – here or in the sub-prime markets of the USA – has caused the credit crisis and even led to a run on a British bank. Stock markets have been plummeting around the world and much of it is due to the scale of the banks’ mistakes.
So private investors, nervous of further falls are busy trying to find a more secure home for the money they are withdrawing from equities. A greater number than ever before are coming to Zopa because here they can get virtually risk free returns of 7% to more than 10%.
And because banks are desperate to find every way they can to recoup the losses they have suffered, they are putting up the rates they charge on loans and credit cards. This is making loans at Zopa look even cheaper than they normally do. So an increasing number of borrowers are flocking to Zopa to get the better personal loan rates we have on offer.
Having our major competitors driving up the number of both borrowers and lenders that come to us has just led to our best January ever. Sometimes, in the rather weird world we are now living, help comes from the most unlikely sources.