Its been months since I last mentioned Zopa, the UK strain of the P2P lending bug which will hopefully wipe-out retail banking and credit cards. So it came as a bit of a shock when I got an email from them yesterday morning loudly proclaiming their imminent launch.
Well, we told you we were coming! At this very minute, we are testing the service and expect to bring it to everybody within a few days.
Thats what they said months ago! Still, as a former Prosper lender (I stopped actively lending back in June), I’m pretty excited to try out Zopa and jump back into the P2P lending space. Zopa promises shorter loan terms, potentially higher returns and lender selected rates (on Prosper rate are set by bid). One line from their email really jumped out at me:
No risk for investors.
Your funds will be federally insured. No more worrying about whether your borrowers will pay your loan back.
No risk and investors should never be used in the same sentence, as it is very rarely true. I’m clearly not the only skeptic out here (and here and here). Why would the federal government insure my private loan to another individual? Makes no sense to me but when it launches, I will be lending… I can spot you $50 for 3 months at 6%, with 200 other strangers. You can use the $10k to fund that new web 2.0 start-up you’ve been dreaming about. You know, that Myspace meets YouTube idea, for English speaking Mexican boys between the ages of 9 and 17, living in the suburbs of Spokane. Its a winner for sure!