Peer-to-peer lender Zopa lures Indian backer

Business & Economy 29 May 2017
Peer-to-peer lender Zopa lures Indian backer

Indian finance giant Wadhawan takes stake in UK fintech firm Zopa

Wadhawan Group is buying a stake in one of the pioneers of the UK's fintech sector, Sky News can reveal.

Image: Zopa has issued more than two billion pounds in consumer loans since its launch

By Mark Kleinman, City Editor

The British peer-to-peer lender Zopa has enlisted financial backing from a major Indian finance group as it plots a move into mainstream consumer banking.

Sky News has learnt that Zopa, which launched in 2005, has attracted a big investment from Wadhawan Group, a conglomerate with interests in a range of financial services sectors.

The deal, which is due to be announced in the coming weeks, will see Wadhawan and other investors inject roughly £40m into Zopa, one of the pioneers of the UK's financial technology sector.

News of the funding round comes just a fortnight after Zopa became the first big peer-to-peer lender to be authorised by the City regulator, breaking a logjam which had threatened to undermine the sector's development.

Peer-to-peer lenders provide a direct link between consumer savers and borrowers, tempting customers with generally more competitive interest‎ rates.

Zopa's move into banking, which may go live next year, comes amid ‎an influx of digital lenders into the UK banking sector.

The company has issued more than £2bn in consumer loans since its launch.

However, some critics have argued that peer-to-peer companies expose lenders‎ to a disproportionate risk to their finances.

Zopa declined to comment on Friday.

Original Article

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