One of the oldest and largest peer-to-peer lenders, Zopa said it had secured £32m funding which will finance its banking infrastructure, as it prepares to submit its bank licence application later this year.
In November, Zopa announced it planned to launch a “next generation” bank, intending to offer deposit accounts, revolving credit products and overdraft alternatives to borrowers in a bid to give UK consumers more choice in financial services.
And now it adds it plans to offer Financial Services Compensation Scheme (FSCS) protected deposit accounts for savers as well as peer-to-peer investments such as Innovative Finance ISAs (IFISA), personal loans, car finance, and credit cards. However, the peer-to-peer arm and credit products won’t be covered by the FSCS.
From 15 June this year, Zopa will offer the IFISA though the peer-to-peer business and it hopes to be able to launch the bank in the second half of 2018.
Jaidev Janardana, Zopa CEO, said: “Zopa’s vision has always been to make money simple and fair for consumers, providing our customers with better value, better service, and greater choice. This investment gives us additional resources to continue our growth, support the launch of our next generation bank, and bring our award-winning products to even more people in the UK.”
Zopa launched in 2005 and following a record month in October 2016, it reached profitability in September 2016. In January this year it became the first European peer-to-peer lender to make £2bn worth of loans.