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£1 billion lent – what does it mean for Zopa and the wider industry?

In more ways than one, 2015 is turning into a year of huge significance for Zopa.

Not only has the company celebrated the tenth anniversary of its launch, but new record lending figures also demonstrate how both Zopa and the wider peer-to-peer loans sector have managed to capture the public imagination.

2015 – a year of milestone growth for Zopa and the Peer2Peer Finance Association

Back in the spring, the Peer to Peer Finance Association (P2PFA) showed that the market was growing far more quickly than the year before, with first-quarter lending up a third on the last three months of 2014.

The trend has proved to be unstoppable, and this month Zopa has reached a hugely important landmark by becoming the first UK P2P firm to lend over £1 billion in its lifetime.

In July, Zopa advanced more than twice as much as it did in the same month last year – £52 million compared with £23.5 million – and the business now has a 2% share of Britain’s personal-loan market.

Behind Zopa’s billion

In reaching the £1 billion milestone, Zopa has helped more than 200,000 customers, comprising 146,000 borrowers and 61,000 lenders. Lenders have seen more than £57 million in interest returned at an average rate of 5% a year. And this is largely over a period when the base rate and returns on bank deposit accounts have languished at all-time lows.

Zopa’s CEO and co-founder, Giles Andrews, says: “Our rapid growth reflects the better value Zopa offers consumers. Zopa is a trusted service for over 200,000 people who are looking to borrow or grow their money. We’re delighted to have lent over £1 billion and will continue to deliver the best service across consumer finance as we aim to lend our next £1 billion in 2016. I’m proud that over the past 10 years Zopa has established itself as a trusted and mainstream service for UK consumers.

“We have an unrivalled 10-year track record in consumer lending and credit-risk management. Our best-in-class data analytics allow us to constantly innovate and learn, meaning we can offer market-leading rates to both lenders and borrowers. New initiatives in 2015, like our partnerships with Metro Bank and Uber, are testament to this and how Zopa is evolving.”

P2PFA figures for the second quarter of 2015 show Zopa’s importance in the wider market – between April and June, more than a quarter of all new P2P loans were made through the platform. Since P2P lending was introduced to the UK, more than £3 billion has been advanced in total with almost a third of this going through Zopa.

P2P lending set to continue growing

But can this success continue? Clearly one of the keys to the expansion of P2P has involved the public getting used to this relatively novel form of lending – and it’s very difficult to see this process being reversed.

But it is not just among lenders and borrowers that acceptance of P2P is growing. The government has also signalled its approval by offering lenders tax breaks in the form of a new “innovative finance ISA” as well as inclusion of P2P in the savings tax relief system due to come into effect next year.

Both of these steps will make lending more attractive while also reinforcing the idea that P2P is now part of the mainstream. As such the future looks every bit as bright as the present.