Zopa Listings, What do you reckon? Options

[zopa_tom]

See this thread and let us know what you think about this new addition to the Zopa site.

[tibsie]

See this thread and let us know what you think about this new addition to the Zopa site.

It's the way Prosper does it, do we really need things done their way? It certainly makes it more personal, borrowers can make their case to lenders and lenders know more about where their money is going. The screenshots look good, borrowers can get a better rate than they might on the markets (or not) and lenders can get lots of money lent out quick as long as they like the rate.

I suppose we will have to wait and see how it turns out.

[Deddington]

As Zopa listings is an addition to the existing way of doing things will it involve another account or will the system be able to differentiate and report between loans under the current way of doing things and the new Zopa listing?

The screen shots don't make it that obvious to me how that will work.

[adilowes]

I presume you decide you are going to offer x amount from your holding account in the normal way and Y in zopa listings? then make individual offers.
I know you said you may not be able to answer all the questions but here are 5 if you wouldn't mind having a look.

1. Do the offers have to be in multiples of £10 or can different figures be offered. ie If I have £14.20 in my holding account can I offer all that?

2. Once a bid is made can it be retracted as long as bidding still going on? Ie if wrong figure typed and £100 offered instead of £10 as currently offer can be edited or retracted?

3. If somebody gets 100% of their loan offered after 5 days yet you are not included due to your higher rate, will your money then be freed up for making another offer? (Effectively because you are outbid as if not will tie a lot of money up for a long time).

4. How are endorsements and friends counted? (Is this mainly if they have borrowed previously on zopa and are friends other zopa members linked to them?)

5. You probably can't say but any timescales, you say a few months. Are we talking 3, 6 or 12 +.

By the way I think it will be a good thing as gives people the chance to interact with the people they are lending to and choose what their money buys. I.E. Not for a Car if believes in going green and not encouraging more cars on the road.

This post has been edited by adilowes: Aug 15 2007, 06:43 PM

[roger_at_zopa]

It raises a few questions for me.

1) This looks very much like a cut down version of Prosper model! Is this needed as the Zopa model is so much faster for the Borrower and Lender and already provides the 'best' rate available. The reason why I say cut down is that Prosper is based around groups in the hope that peer pressure improves the repayment rate.

2) Is any work planned on the performance of the "offers to Borrowers" and "My Borrowers" web pages these are already breaking when you have many entries and lending this way will mean a lot more entries in the "offers to Borrowers" screen.


I would perfer to be told about improvements that fix the problems and limitations people are seeing with the current system, rather than to be told about a new service. As it is I can see 2 issues

1) This is going to cause people to have to commit funds for up to 12 days to one of these offers, which will take funds away from the current markets.

2) Once someone has waited 12 days for the offer to build up the first thing they are going to do is get a quote from the current Zopa system and if it comes in less take that instead.


Roger

[adilowes]

I agree with Roger some of the existing screen problems need sorting before this comes in or the screens will fall flat on their bums. I only have 163 borrowers and it takes ages to bring up my borrowers.

[chancer]

my conern is over the honesty of the lenders and zopa's position as middleman

if a lender, vetted by zopa, claims a debt to income ratio of 10% and is borrowing for home improvements, but then defaults and it turns out they their debt was 30% and they were spending it on a holiday, who can i sue to recover my losses?

[cornetto]

I also agree with Roger.

I can see that it would be interesting to see the various borrowers but surely it will be far too time consuming for the lenders and will be quite frustrating to spend the time only for the borrowers not too bother as the rate is too high etc

I have 300 borrowers and tracking them is already a monthly chore that I really could do without. I would happily put in more £s to Zopa if there was a decent screen to track progress on each borrower's repayments. As it is I need to maintain an Excel equivalent or live in some hazy world where I hope that everything is OK.

Please, please, please Zopa sort out the repeated requested improvements on the "My Borrowers" and "My Statement" screens and then worry about these other "nice to haves"

[Ledney]

Seems like a good idea for borrowers, if they don't mind giving a lot of personal information in a semi-public place and waiting some time for a loan. They get the possibility of a cheaper than usual zopa loan and if not can revert to a standard zopa loan.

I don't see much benefit for lenders, since these loans must be cheaper than the standard rates to be accepted.

Lenders are being given the opportunity to decide for themseves whether someone is a better than usual risk (or a more deserving borrower), to give a lower than usual lending rate. However lenders may be misled into thinking people are better risks (or more deserving) than they actually are, some people can be very convincing.

I also agree with Chancer, how do we know how honest someone has been on the listing and who takes responsibility for the accuracy of the content (and what was left out).

I think I prefer to rely on Zopa's objective judgement of individuals.

[jaynieeee]

Sorry Tom

But not interested in this what so ever.

1. I set the rates in the markets and terms I want to lend in and let Zopa do the rest.
2. I'm not on here everyday, and don't to have to be, to check out who is looking to borrow.
3. I don't want to spend time trawling through and reading pages of Zopa checked borrowers.

If Zopa had a section where small businesses were put forward by "approved" accountants/business advisers then I'd be interested in the idea of pages highlightening those options, but have no interest in trawling through pages of Zopa checked borrowers to do what the automated system already does for me.


Jane

Edited to read better

This post has been edited by jaynieeee: Aug 16 2007, 10:57 AM

[Catlover]

Nope. Not interested in this either, for all the reasons stated by other lenders above. I can already decide the type of person I lend to in terms of creditworthiness and have a ticklist of markets - A36, B24 etc I opt out of the ones i don't want. Surely, a much simpler way would be to build in a mechanism where an individual lender can block their £10 being offered to certain categories of loan purpose, if they are wildly against cars or whatever, the same way you can block lending to C lenders if you want. Surely lenders could be shown a ticklist of categories of loan purpose and could opt out of certain ones if they felt strongly enough.

That would have to be simpler and quicker than trawling through pages of people explaining why they want your money. I can't imagine it would be rocket science to write that into the software???

Have I missed the point?

[ng51online]

Nope. Not interested in this either, for all the reasons stated by other lenders above. I can already decide the type of person I lend to in terms of creditworthiness and have a ticklist of markets - A36, B24 etc I opt out of the ones i don't want. Surely, a much simpler way would be to build in a mechanism where an individual lender can block their £10 being offered to certain categories of loan purpose, if they are wildly against cars or whatever, the same way you can block lending to C lenders if you want. Surely lenders could be shown a ticklist of categories of loan purpose and could opt out of certain ones if they felt strongly enough.

That would have to be simpler and quicker than trawling through pages of people explaining why they want your money. I can't imagine it would be rocket science to write that into the software???

Have I missed the point?

It's nice for the social element, but surely it will result in lower returns as fellow lenders take pity on those borrows with heart renching stories? No?

Be interested to see how it pans out, as I like the prosper model

[Shiggaddi]

I do think the 12 days is a fairly long time to commit your money, but there is no rule saying you have to commit your bid on day 1. You could wait until day 11 to put your bid in, or even in the last few minutes, and like ebay there is a facility to make a better offer, but is there going to be a facility to withdraw your offer? If I make a bid on day 1, and I'm not prepared to lower my rate and I'm outbid on day 3, I'd rather the money I have committed to the loan is used to lend elsewhere. Also, I would imagine that if you are allowed to change your mind, then if you're outbid then the bid is still live, just incase someone higher up the pecking order pulls out.

However, it may be confusing for some lenders. If someone is approved and would normally be a C borrower, there is nothing stopping them giving out rosy information and set a lower guide limit, and people would bid on them thinking they were an A borrower, so I would like to see the market they have been placed in, so I would set my bid according to the rate I have in that market, rather than trying to do the job as credit control.

Also, the money that I have on offer in the normal markets, the only way to withdraw some of your money, is to withdraw the offer, then set up the offer again, and transfer the amount you want from the money that was taken from the last offer.

I think like any new idea, there will be glitches and these glitches will be improved with time after feedback from us, but I'd like to contribute to loans in this market but not at the expense of lending at a lower rate.

[zopa_tom]

Thanks for all your comments. Please keep them coming, positive or negative - they all help.

A few answers to questions that have been posed:

1. Do the offers have to be in multiples of £10 or can different figures be offered. ie If I have £14.20 in my holding account can I offer all that?

Multiples of £10 is the plan

2. Once a bid is made can it be retracted as long as bidding still going on? Ie if wrong figure typed and £100 offered instead of £10 as currently offer can be edited or retracted?

We're still fleshing out the details on this - what's your thoughts?

3. If somebody gets 100% of their loan offered after 5 days yet you are not included due to your higher rate, will your money then be freed up for making another offer? (Effectively because you are outbid as if not will tie a lot of money up for a long time).

A good point. Let me check with the tech boys and see what the current plans are.

4. How are endorsements and friends counted? (Is this mainly if they have borrowed previously on zopa and are friends other zopa members linked to them?)

sorry - you lost me. Are you talking about the Tell a Friend scheme?

5. You probably can't say but any timescales, you say a few months. Are we talking 3, 6 or 12 +.

More likely towards the lower end of your guestimates.


@Deddington - I think we will treat them as separate in your My Zopa. I'll get Justin to confirm though, as he's closer to this than me.

@chancer (and others) - we're still fleshing out the whole issue of accuracy of data and where the responsibility lies.


Sorry most of those answers are vague. I'm not being deliberately ambiguous, it's just we're still fleshing out the exact mechanisms. I'll keep you posted about developments.

[CheckSum]

I find that Zopa is already a high-maintenance form of investment. It takes a lot of fiddling around on a website that, to be blunt, feels like a prototype set up for someone with a lot of time on their hands who wants to offer fifty pounds to five people. It's that type of lender who will like the Listings service.

IMO listings will be of no direct use to serious investors. Its value to me would be if the new service gets press coverage for Zopa and increases borrower awareness of the company. I'd be disappointed if that wasn't the real reason it's being set up. Journalists love human interest and every listing will have it's own story.

Anyway, I have ca 250 borrowers of £100 lumps. I really don't care who they are or why they wish to borrow money. I'm just pleased that they do and am happy to oblige. Once a month I want to know how much capiital is on my loan-book and what its spot yield is. I also want to shift my offers up and down in parallel to reflect prevailing interest rates. I'm hoping that when the developers have finished fiddling with listings they could add a page specifically for people with my approach.

C.

[adilowes]

The question about endorsements and friends came from one of the screen shots on the left hand side it said endorsements 0, Then Friends and a number.

I agree with Shiggaddi about the 12 day.
From the borrower point of view anybody who is wanting a loan is at least going to want to know what rate they are going to get fairly quick.
For example.
Somebody is looking to buy a car. They go to a dealership and they quote x rate straight away, Their bank quotes y Rate straight away. They come to zopa. Through the normal process they are credit checked fairly quickly and offered a rate quickly. This new way they are credit checked and won't get a rate for 12 days. They are probably not going to wait to see if it is half a % cheaper or not.

From Zopa point of view there has to be enough time to get bids in.

As pointed out earlier you could make a bid on day 1 and get out bid by a cheaper rate on day 11. Your money is stuck in processing all that time.

How about lenders bid. The borrower can accept the loan at any time from when the loan gets 100% up to a maximum of 12 days.
So if the loan reaches 100% by day 2 at 8.3% the borrower can either accept it or post that they won't accept at that rate and then Lenders can bid lower if they want or retract their offer if not willing to lower it. That way the Borrower can get an offer as soon as possible and we can get money lent out quicker or if they want to risk not getting 100% they can refuse it or indicate they will refuse after the 12 day mark. Similar to the buy it now or best offer system on ebay.

I think zopa should post which credit band the person is in as mentioned earlier so we can judge the risk and percentage of available income should also be posted by zopa from the application form and credit check info.

I can see what zopa is trying to do with this and make it more sociable and in their defence they are planning on running this at the side of the existing system so anybody who does not want to be checking their account regularly can use the existing way with autorelend on. In the same way if zopa sick to the 12 day system any borrower who wants a quick loan can use the existing way. I do feel that the new way won't get much use if on the system stated originally unless the flexibility is built in both for the borrower and lender.

This post has been edited by adilowes: Aug 16 2007, 08:33 PM

[roger_at_zopa]

Since the original post on this subject I've spent some time looking at the data that Prosper publishes, and I have to say that the whole US market place seems very different from the UK market or the market that Zopa is currently aiming at in the UK.
I do have to ask - is the whole point of this new feature just a way to have UK users beta test a system that you need to compete against Prosper in the US market place?

The only positive thing I can think is that Zopa is hoping that this new structure will support the funding of larger loans as lenders may start to offer larger sums per bid if they have to invest so much time reading each profile. The result will be lower rates for larger loans. To be honest I would be offering larger sums per offer if the current Zopa system could tell me what on earth is happening with the current 1200 borrower agreements I have in place.


Just looking at the Prosper's public web site I can see

1) Details on the size of their loan book ($82m)
2) Details the amount in each market.
3) Makes it very clear on how a loan was structured - offers made, by who and what size.
4) A 30-Day moving Average of interest rates received on fund ($1K-$5K, $5K-$10K and $10K-$25)
5) Very powerful Loan performance screen with changeable start and end date - also changeable Observation date.
6) And most important of all there is a published API that allows third parties to provide stats and analytics tools.

And I'm sure there is a lot more information available once you log in.


A new way to lend does not fix the problem that lenders will get to a point where they are unwilling to extend their exposure to the Zopa markets, providing the correct information so that lenders feel safe about putting more fund in is the only way this will happen.

Roger

[CoogarUK]

I thought I had replied at length yesterday with my own views but I must have pressed the wrong button or something.

Suffice to say that I couldn't agree more with what roger has been saying on this thread up to now.

[roger_at_zopa]

I have to add that doing research on Prosper does make me feel a bit better about the level of service that we are seeing from Zopa, while I (and others) have expressed a range of negative feelings about the current status of the Zopa system, you just need to read the Prosper forums to get very, very worried about how things could turn out.

There are threads on Prosper that are discussing past lending structures by groups that are very close to being frauds (at least in the UK)!!!

I think these statement copied from a thread on the Prosper lender forum show the current difference

Zopa seems to stink on the technical side, where Prosper rules. And Prosper seems to stink on the operational side, where Zopa seems to do fine. Ugh.

this recent thread at Zopa is interesting..In it, Zopa Tom (CTO) is participating and organizing communication channels to address issues. This clearly contrasts with Prosper CTO Witchel's response of basically buzz off and stop contacting me through "back channels"

Roger

[Deddington]

As Justin said when he announced Zopa listings on the web chat Monday "Like Prosper but better" we will see.

I am in agreement that "Listings" should not deflect attention from the current bugs and improvements needed in the existing Zopa site, however I would be interested in pitching for lending in specific request outside of the existing frame work.

I have the time to pick and chose and from my experience with Kiva find it attractive to have more control over what and who I loan to.

I actually enjoy the hands on bit of Zopa. If I am too busy then I leave it on auto pilot - when free I duck and weave to grab a point on the rates.

I am expecting "Listings" to offer returns equivalent to or above the current C market and give an "Angels" feel to what we do as lenders.