More than eight years of solid returns from peer-to-peer lending for Kim Beadle have finally convinced her accountant husband that she was right to set up a Zopa account.
Kim, from Warlingham in Surrey, joined the site back in March 2007 at age 49, just two years after Zopa was founded and a few months before the start of the credit crunch. But at the time, Kim’s husband Steven thought that the idea of P2P finance was simply too risky and was unlikely to generate the kind of returns that Kim, now 57, was hoping for.
“Now I show him my statement and say, ooh I seem to have made a lot of money,” she says. Kim has also taken great pleasure in pointing out the financial awards and accreditations that Zopa has received, she adds.
Kim’s background at a large financial firm in the City meant she was often looking for interesting or innovative things to do with her spare cash. “I had tried day trading, for example, but when I heard about Zopa I was really interested.”
The attraction of peer-to-peer
The initial attraction was the social aspect of P2P platforms, where lenders’ money went straight to borrowers. “I was amazed how much the banks were charging people who made a mistake on their accounts, especially given how low returns on savings were,” says Kim, who now works as a manager for a charity. “But I thought the ‘people power’ element of peer-to-peer finance was such a nice idea.
“I know how people can struggle when money is tight, but the banks charge so much. It’s nice to be able to help in this way.”
Being part of the Zopa community
Kim also likes the community aspect of being a Zopa lender – “The parties, get-togethers and the anniversary offers are all nice touches. They show the loyalty Zopa has to its customers, which is again something the banks have been criticised for not demonstrating.”
When she started lending, Kim was fairly cautious in terms of how much money she put in. “I was a little nervous because it was such a new approach. But the site was very easy to use, and Zopa was transparent about how the process worked and what the risks were.”
Lending during the crunch
When the credit crunch started, Kim didn’t have a lot of money lent out, but she says she felt her loans were protected by Zopa’s diversification policy. “I was still getting good returns, and Zopa was keeping me informed about what was going on.”
Over the years and before the Zopa Safeguard was introduced, Kim did experience some bad debts but believes it is more important to focus on the “bigger picture”.
“In eight-and-a-half years, bad debts have been insignificant for me really. Peer-to-peer lending is clearly a model that works.”