ZOPA is working to enable greater diversification of investors’ funds, the new head of its peer-to-peer lending business has revealed.
Natasha Wear (pictured), who was promoted from head of investment products in February, told Peer2Peer Finance News that the P2P giant is developing its technology so that investors’ money will be split into smaller segments, which will then be channelled into a greater number of loans.
The system currently splits investors’ money into £10 chunks which are then allocated to different loans in order to spread the risk of any defaults.
Read more: Zopa turns Open Banking focus to investors
“A general rule of investing is that more diversification is better,” she said. “So we are looking to go to £3 chunks by the end of the year and ideally down to £1 chunks at some point after that.”
The change requires Zopa to be able to support up to 300 million of the new, smaller microloans, more than three times as many as it currently does.
“You have to keep investing in the tech because as soon as you stop you will be behind,” added Wear.
Read the full profile with Wear in the April edition of Peer2Peer Finance News, now available to read online.