Zopa says ‘over the last few years, customer trust in P2P investing has been damaged by?a small number?of?businesses?whose approach led to material losses for retail investors. Linked to this, the changing regulation which followed raised the operational costs of running a P2P business, as well as the cost of attracting new investors to the Zopa platform. To offset these increased costs and ensure we have a sustainable and profitable business, we’d need to reduce investor returns to a point where they’d no longer be attractive and commensurate with the risk that investors take on.’
The last step: ‘By 31 January 2022 our investors will receive the full value of their invested balances in their Zopa holding accounts. This means that no investor will miss out on any of the interest they’ve already built up. There will be no impact on borrowers as Zopa Bank already services them and their loans will continue unimpacted.’
Zopa has lent over 6 billion GBP in p2p lending loans. In 2016 it applied for a banking license which it received in 2019.
Several other UK p2p lending companies took similar steps earlier and closed their platforms for retail investors and focussed on institutinal investors.