The fund would be some sort of trust set up to benefit lenders with non performing loans.
A* longer currently has expected bad debt of 0.4, and with a tiny bit added on make that 0.5. Together with lender fee of 1% and current rates of 6.9% X would have to be 5.4 to get matched at the moment. It seems unlikely with prices as they are today much would be matched in B, C or Y.
As a lender would have no risk (subject to Zopa surviving and the provision fund being large enough) the lender is ambivalent to which underlying market the money is actually lent in.
I don't see rates being negative. (A++ shorter would have X at 4.3% with a headline rate of 5.9% and 1% lender fee and fund contribution of 0.6%.)