Peer-to-peer lender Zopa has announced a ‘first of its kind in the UK’ partnership with Metro Bank which indicates confidence in the market...

Zopa says it’s a clear signal that some parts of the UK banking sector are embracing P2P lending as a new asset class.

CEO and Zopa co-founder Giles Andrews called it another milestone for the industry which brought together “two key challengers to the traditional financial services landscape and signals our intent to become a mainstream service.”  

Giles believes the new partnership will prove that Zopa is a trusted platform “not only for consumers but also for institutions to deploy their funds.”

Development finance specialists Regentsmead already has an established partnership with Metro Bank and referred to the bank as a “great brand” with which to be associated.

“The P2P market seems to be gaining new entrants all the time, however I think the true test of lending practices shows during a bad market, which may be some time down the line. For now I’m sure they will do very well,” said Regentsmead’s Ashley Ilsen.

Recently however, P2P lending was discussed at the UKPP Property Finance Conference where this type of finance was likened by some as an accident waiting to happen.

“The danger is that if you fail to obtain funding with a high street bank, you fail to get anything from an alternative lender and therefore the only option is the peer to peer sector; there’s a danger that it becomes the garbage men of the lending industry,” explained Director of MT Finance, Joshua Elash.

Bridgebank Capital’s MD Laurence Goodman agreed, calling P2P “an accident waiting to happen” adding it was going to be “the next major regulatory investigation, it’s got short shelf life and it will be closed down.”

However, Metro Bank CEO Craig Donaldson is confident Zopa can help it lend funds to customers.

 “We are continually looking to work with partners that can benefit our customers and Zopa are the perfect players in the P2P space to help us lend funds to consumers.

“The partnership we have with Zopa is a cultural fit that works perfectly with our commitment to providing a convenient and customer-focused banking experience and we look forward to working with them closely.”