The 2008 financial crisis was the making of Zopa, the peer-to-peer lender’s co-founder Giles Andrews has claimed.
Andrews (pictured) helped launch Zopa in 2004 and became chief executive in 2007, overseeing the growth of the platform during the financial crash when mainstream savings rates declined and bank lending reduced. He became chairman in 2015.
“I describe the financial crisis as the making of Zopa,” Andrews said while chairing a panel at the LendIt Fintech Europe 2020 conference last month. “We did some of the best lending we have ever done. “It is too early to say if [the pandemic] represents the same opportunity.”
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He was joined on the panel by representatives of institutional backers including Alison Harwood, head of the London branch for Varengold Bank and Pedro Coelho, chief executive of Banco BNI Europa.
Both Varengold and Banco BNI Europa have previously invested in P2P lenders. “There is a huge opportunity for the industry to show what digitised origination methods can do,” Harwood said. “Those who can show they have better access to more current data when applying their credit scoring methodologies have a real natural advantage over others who cannot.”
Coelho said the pandemic has created both an opportunity and a threat for alternative lenders.
“These fintechs are able to gather more clients as they are more digital, enabling clients to get credit without accessing banks that need more physical contacts,” he said. “The threat is that… everyone needs to rebalance their credit model to allow for some difficulties that clients may face.
“Some business industries have been heavily affected and consumers have lost their jobs.
“Lenders will need to have a good look at their existing portfolios to see the impact of payment holidays and if borrowers will pay once they are over.
“It is an important test for established platforms and an opportunity for those who can adjust more quickly.”
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