TAPS: Zopa and Credit Unions
Posted by Matt Dean on September 13th, 2006
Wade Lagrone just introduced the concept of Zopa to the audience at the TAPS Lending Symposium. As our readers know, we’ve been excited about peer-to-peer (P2P) lending since we first learned about it.
I won’t rehash the “what is Zopa?” discussion here as you can learn about it at their website, but I must say that Zopa truly understands the credit union industry and is actively working to establish partnerships with credit unions. The level of partnership will largely depend on the participation they receive from CUs, but if CUs recognize this opportunity then the partnership opportunity is HUGE. Imagine if all new Zopa members in the US were asked to join a credit union in order to participate!
I’m going to ask Wade if he will write a post for Open Source CU outlining the benefits for credit unions, but here’s a few remarkable numbers:
- P2P membership growth is growing at 11-25% a month for Zopa in the UK and loan growth in P2P lending in the US (I’m guessing this is based on Prosper’s loan growth since they’re the only ones in the US market now) is growing at 25% PER MONTH.
- The average Zopa member is 36 years old with 59% of members in the 18-34 demographic. Compare this to credit union members at an average age of 47 with 23% between the ages of 18 and 34.
- Instead of paying an average of $327 per new member (as of 2005), credit unions could actually get paid for new members.
I’ll let Wade fill in the details (hopefully), but just know that he understands and believes in the credit union movement. I’m excited about the possibilities!
I was just reading something about P2P lending and checked out www.prosper.com. It’s a pretty cool site. It’s really like an ebay for lenders and borrowers. Essecially, anyone can become their own bank with at least $50. It’ kind of like zopa.com, but the US version.
www.prosper.com
Prosper is definitely a player in the peer-to-peer space. We’ve discussed them several times on here, but we admittedly skew towards Zopa largely because of the interest they’ve shown in the CU industry. Prosper is currently the only option for people in the US looking to get involved, but hopefully that will change soon!
Matt is right, Zopa is passionate about partnering with credit unions and wants credit unions involved in their U.S. launch. Stay tuned as I expect there to be more exciting news forthcoming.
Well, I think you cover the bases pretty well above, Matt! We really do think it’s a great fit between credit unions and Zopa. From our perspective, partnering with us could yield quite a lot of benefits for credit unions, but I’d narrow it down to two big ones: growth, and youth.
Growth, because there’s a pretty big untapped market for unsecured personal loans—data from the Federal Reserve indicates that there’s roughly 4 times as much in private unsecured personal loans among family and friends as in the entire credit union industry. Not that credit unions are obsessed with growth in the way some institutions might be, but they do want to help more people. We can help make that happen.
And Youth, because our product, and the idea of online peer to peer lending in general, has a lot of appeal to younger, web-savvy people. Our UK experience bears this out, for sure—our users there are much younger than a typical financial institution in the U.S., as you point out.
Wade—
I’m jealous that everyone at the TAPS conference got the pleasure of your company instead of those of us out here on the West Coast! I’ve heard great things about the conversations you guys had over there this week and I’m glad to hear more CU people discussion the options with P2P lending.
I also must say I’m incredibly glad to hear your willingness and desire to partner with CU’s in your venture into the US. I must admit, I’ve been doing the Prosper thing for a while, but I’m itching to switch over to Zopa! Keep those emails coming for those of us on that waiting list!
And if you’re ever on the West Cost (or in Portland), let us know! I’m sure there’s a good group of people over here waiting to meet ya!
It is fantastic to see a UK company getting such great press. The Zopa idea is astonishing in it’s simplicity and tenacity.
Bit for me it’s the fact that it’s a company in the UK that has pushed the idea – as a country we dont take risks like this often.
Lets hope the USA embrace the idea – as I fear that the UK will wait for you guys to embrace the idea first.
I love reading your blogs. I am one of those people who reads but never leaves a message. Do you guys know about KIVA.org
It is also kinda p2p lending.
I would appreciate if you write about them. I would like to know what you think?
A happy new year!
Arzu
Arzu, Thanks! I actually thought we’d written a post about them, but I was wrong. Searching through our older posts I just see one brief mention in a post I made last April.
So, you’re right – they deserve a post all to their own, and now I’m on it!
Thanks again … and keep commenting! ;)