Zopa, which began as a peer-to-peer lending FinTech, has confirmed it will exit the P2P market completely.
Zopa will wind up its P2P business by January.
Since it was founded 16 years ago it has moved from a P2P lender to a full-fledged bank.
It received its banking licence 18 months ago.
What does this mean?
Moving away from the P2P model, which Zopa pioneered, means that Zopa Bank will have to buy the retail P2P loan portfolio back from around 60,000 investors. This means borrowers will not be impacted in terms of their repayments.
According to AltFi, Zopa’s CEO Jaidev Janardana has said that regulation as well as “growing negative retail investor sentiment” toward P2P lending during the pandemic contributed to the conclusion by Zopa that a P2P model is no longer commercially viable.