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Author: Sacha Bright & Oliver Murphy
The P2P lender, Zopa, has announced it will stop lending to borrowers in higher risk bands in response to the coronavirus.
In an email originally seen by Peer2Peer Finance News, the lender will stop originating loans that would fall into its C, D and E risk bands.
Now, the platform will only fund loans in the A* and A bracket, with Zopa Plus funding loans in the B risk band.
The end of high-risk lending would, according to Zopa, see its total origination down 75 to 80% this month compared with the start of the year.
“With the money available for Zopa to lend, we could originate much more but have taken this step as a precaution to make sure your money and that of our institutional investors is only invested in loans to customers who can afford them even in the face of this economic uncertainty,” an email to Zopa investors said.
As NextFin has reported, Zopa has already introduced a raft of other measures to protect investors from the economic impact of coronavirus.
Unlike other platforms, Zopa says that it offers investors a portfolio of loans over fixed terms and this is how it has been able to deliver positive returns in downturns and upturns.
In a statement, Zopa said: “We’re living through troubling and uncertain times, and we know that lots of you are concerned about the impact of Coronavirus on your finances.”
The platform has also offered assurances to investors, suggesting that the volatility across the stock market is not something it expects to see replicated to the same extent in its investment performance.
Disclaimer
Please remember P2P lending is not guaranteed by the Financial Services Compensation Scheme (FSCS), so at the moment your money is at risk if you decide to invest in a P2P site
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