Zopa introduces platform limit, stops accepting new funds
Leading marketplace lender forced to raise drawbridge as lender demand runs riot.
Zopa, the world’s original peer-to-peer lender, has introduced a limit on how much new money can be loaded onto the platform at any one time. Money typically takes around five days to be allocated after being deposited on the platform. With allocation times set to be slow in December, due to a lot of queued funds, Zopa has temporarily stopped accepting new money transfers.
As far as we’re aware, this is a first for the platform, and perhaps for the UK’s peer-to-peer lending industry as a whole. The move is an attempt to ensure that investor cash is always lent out in an “acceptable” time, without having to compromise on credit quality in order to keep pace with investor demand.
Zopa’s website currently displays the following message to investors:
“We are not accepting new money transfers. Any new money transfers into the platform will be refunded directly to your bank account.”
The changes to the platform will not affect funds that have already been deposited by investors, irrespective of whether they’ve already been lent out or not.
The lending limit appears to be here to stay, with Zopa advising lenders that it will not hesitate to use it in future months, if the platform experiences “longer lending speeds”.
Zopa says that queues have been increasing because of a swelling in its investor base in recent times, both in terms of new investor sign ups and total funds. The firm says that this growth has “outstripped” the growth of new loans. According to the Liberum AltFi Volume Index UK, Zopa has originated a little over £53m in the past 30 days. This represents a reasonable drop-off from recent months. Zopa established consecutive origination records for itself in September and October, with £68m and £75m lent respectively, according to AltFi Data.
In answer to why Zopa is not simply content to allow lenders to queue for longer, the firm writes:
“We believe money should be simple and fair. We don’t think it’s fair for you to wait too long to lend out your money.”