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Exploring the Public Zopa Loan Book

As we have written many times on this blog, the availability and transparency of data are major reasons behind the dramatic growth in marketplace lending. As a new method of financing loans has come into being, investors, borrowers, regulators, and the media have been able to gain comfort and confidence from their ability to explore data that is made publicly available for download. While we were in London last month for the AltFi Europe Summit, our friends at AltFi Data announced that three of Europe’s most prominent marketplace lenders were making their full loan books public on a monthly basis: FundingCircle, Ratesetter, and Zopa. In today’s blog post, we will conduct an initial analysis on the Zopa loan book data.

 

Historic Volumes and Growth

 

The chart below shows Zopa’s monthly origination volume over time. The first thing we notice is that Zopa began lending in 2005 – 10 years ago and even before Prosper or LendingClub got started!

zopa-orig-bymo

 

While Zopa lent just GBP 1.5MM in their first year, that volume rose to GBP 266MM in 2014.

 

Interest Rates

 

In 2014, Zopa’s median interest rate was 6.38%, with 75% of loans falling between 5.40% and 7.46%. This range is certainly narrower than what we’re used to seeing with U.S.-based consumer lenders, showing how much the rate environment differs from country to country.

zopa-dist-by-intrate

Loan Duration

 

As we can see in the graph below, the most popular loan durations on Zopa are 60 and 36 months. However, there is a decent volume in 48 and 24 months loans as well. Just over 1% of loans granted in 2014 were for 12 months, and 6 month loans are no longer offered.

zopa-termdist-yr

 

What’s Next?

Zopa pioneered P2P lending in 2005. In 2015, they are still going strong, and it is great to be able to explore their loan book. In future posts, we will delve deeper into the data, including loan performance and returns.