Alternative Lending Platform is strengthening its stature with banks joining the game. UK’s Metro Bank has joined hands with peer-to-peer lending platform Zopa to lend money through Zopa’s platform. The deal marks the first of its kind in the UK in which a bank lends money through a peer-to-peer lending platform.
Zopa's CEO, Giles Andrews, depicts the partnership as a "clear sign that Zopa is a trusted platform not only for consumers but also institutions to deploy their funds."
Giles Andrews added, “This is another milestone for Zopa and the P2P industry as this partnership brings together two key challengers to the traditional financial services landscape and signals our intent to become a mainstream service. Partnering with Metro Bank is an exciting move for Zopa as I believe both companies share the same values in providing exceptional customer service but through different channels.”
Metro Bank is the first high street bank in more than 100 years to have begun lending funds to Zopa’s consumer borrowers. It views peer-to-peer lending as a new asset class. By lending through Zopa’s platform, Metro Bank will be helping UK consumers get a loan to finance a car, home improvement or consolidate existing debts such as expensive credit card debt, and in turn generate an attractive rate of return.
Craig Donaldson, Chief Executive Officer at Metro Bank commented, “At Metro Bank, we’re committed to revolutionizing UK banking and we’re delighted to have partnered with Zopa, a fellow financial challenger. We are continually looking to work with partners that can benefit our customers and Zopa are the perfect players in the P2P space to help us lend funds to consumers.“
The British Government’s recent scheme of promoting alternative lending for small businesses is making way for banks to support alternative lending. The government scheme requires banks to refer small firms rejected for loans to alternative finance providers by 2016. Metro Bank’s deal with Zopa seems to be an initiator of this scheme which leads the way for small and medium businesses to borrow money from peer-to-peer (P2P) platforms instead of relying on traditional banks.
A recent statistic suggests that small and medium businesses account for over 99% of all private sector businesses in the UK and have employed 15.2 million people the last year, which cannot be neglected as it proves to be the crux of the country. Viewing this as an opportunity, HSBC is increasing its lending operations to small and medium businesses in UK by more than 25%to £8 billion this year.