Zopa, an online peer-to-peer lending platform, has fuelled its growth with riskier loans, according to credit ratings agency Fitch’s analysis. The first-ever rating of Zopa’s securitised loans – the first to be offered by a European consumer marketplace lender – found that riskier lending increased at the same time as Zopa’s growth starting in 2013. Riskier loans included lending to those with lower average credit scores, giving longer terms and having a higher share of debt consolidation loans. In 2014, Zopa’s business model was criticised for encouraging borrowers who were not creditworthy enough to repay their debts.
Zopa, an online peer-to-peer lending platform, has fuelled its growth with riskier loans, according to credit ratings agency Fitch’s analysis. The first-ever rating of Zopa’s securitised loans – the first to be offered by a European consumer marketplace lender – found that riskier lending increased at the same time as Zopa’s growth starting in 2013. Riskier loans included lending to those with lower average credit scores, giving longer terms and having a higher share of debt consolidation loans. A total of 80% of Zopa’s £1.6bn consumer loans were made after 2013.