Zopa quits US

Zopa quits US

Peer-to-peer lending platform Zopa is shutting down its operations in the US - just 10 months after launching in the country - due to tough market conditions.

UK-based Zopa raised $15 million for the launch of a US-based start-up, which went live in December last year.

For regulatory reasons Zopa teamed with credit unions to facilitate lending, rather than operating a pure P2P marketplace as in the UK and Italy. The credit unions enabled lenders to park money in Zopa-branded certificate of deposits (CDs) that were then used to help fund the loans to borrowers.

But on the US site's forum, Doug Dolton, CEO, Zopa, says: "Due to the extremely difficult consumer credit circumstances in the US, we made the decision to focus our ongoing efforts in the UK, Italy and Japan."

Dolton also rejected claims - which he says were made by "one of our colleagues in the UK" - that the credit unions involved had "pretty much stopped making loans". "That is not the case at all," says Dolton. "In fact, our credit union partners made more loans through Zopa last month than the month before."

Zopa says over the next 90 days US customers will be transferred to the credit unions, dealing with them directly. Until then existing customers can still log in to their accounts and make extra payments. However, potential borrowers and lenders visiting the Zopa site will be redirected to its credit union partners.

Loans will have the same rates and payment dates and CDs will have the same rates, maturity dates and federal insurance protection.

Earlier this week Zopa claimed the credit crisis was resulting in soaring interest from both borrowers and lenders in the UK, as traditional banks tighten their lending criteria.

Comments: (0)