Peer-to-peer lender Zopa passes £2 billion loans milestone

LONDON - Zopa, the fintech businesses credited with inventing peer-to-peer lending, has passed £2 billion ($2.5 billion) in loans over its online platform.

The milestone means Zopa is still just about Britain's biggest peer-to-peer lender by historical loan book. Funding Circle, which lends to small businesses, has lent £1.92 billion since its launch in 2010.

Zopa says in a release on Monday that the £2 billion in lending represents 300,000 loans made to 246,000 borrowers since its founding in 2005. 75,000 investors funded the lending over the platform.

Zopa CEO Jaidev Janardana says in an emailed statement: "We're excited to be the first UK peer-to-peer lender to pass the £2 billion milestone. Over the last 12 years, we're proud to say we've helped over a third of a million people get better interest rates for both borrowing and lending."

Zopa connects consumers looking to borrow money with investors who are willing to lend directly to people for good returns, a concept known as peer-to-peer lending. Banks usually sit in the middle of this process, taking deposits from savers and lending it to borrowers who come to the bank for money.

The £2 billion milestone comes broadly in line with company forecasts. Zopa hit its first £1 billion of lending in August 2015 and cofounder Giles Andrews told Business Insider at the time that the company expected to reach its second billion "towards the end of next year [2016]."

Zopa says 34% of its loans go towards purchasing a car, 31% go towards debt consolidation, and 20% are spent on home improvements. Borrowers' average income is £30,000 and the platform has earned investors £129 million in interest.

The fintech business recently announced plans to launch a bank alongside its peer-to-peer platform and Janardana says in Monday's release: "The £2 billion milestone demonstrates how far we have come, but our journey is only just getting started. Our decision to launch a next generation bank reflects our mission to create better options for consumers and to shape the future of finance."