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Zopa close non-Safeguard lending offers
Zopa launched Safeguard back in May 2013, and they have now taken the decision to withdraw all non-Safeguard lending offers from 11th July. This change isn't a surprise as non-Safeguard lenders found that their funds weren't getting any matches.
One potential drawback with Sagefuard is that lenders are now no longer able to set their interest rates, which was one of the founding principles of peer-to-peer lending, and the reason why Zopa had its name. The zone of possible agreement was the region where borrowers and lenders could agree on an interest rate. However, on the whole, we are supportive of this move as the provision fund should give lenders a large cushion for bad debt.
Here is the fill statement from Zopa:
We're constantly working to improve Zopa and ensure all our savers are able to earn a good return by keeping their money working. This notification is to inform you that:
- From 11 July 2013 we will switch off the matching of money on non-Safeguard offers.
- From 5 August 2013 we will begin a migration process to transfer any non-Safeguard offers that have not been withdrawn to a Safeguard offer.
- From 5 August 2013 an updated version of the Zopa Principles will come into effect.
Please read on for more details about these important changes and what action may be needed.
Closure of non-Safeguard offers
Due to the popularity of Safeguard lending at Zopa, there is now almost no lending through non-Safeguard offers. This means that if you have unlent money on a non-Safeguard offer you will be missing out on interest and we would like to help you solve this. We are therefore announcing the closure of non-Safeguard lending offers.
When will this happen?
As almost all lending is now through Safeguard offers, we will disable the matching process to borrowers from non-Safeguard offers from the 11 July 2013. You can find out more about Safeguard lending on our blog.
From 5 August 2013 any non-Safeguard offers with unlent money or with Auto Top Up enabled will be automatically transferred to a Safeguard offer.Find out more in our migration FAQ.
If you wish to continue lending on Zopa you do not need to take action. However, if you have unlent money on a non-Safeguard offer, you will earn interest more quickly if you sign in to your Zopa account and move your money onto a Safeguard offer today. Read our Safeguard FAQs for how to check if you have any unlent money on a non-Safeguard offer and how to switch to Safeguard if you haven't already.
If you do not wish for your non-Safeguard offers to be transferred to a Safeguard offer, please sign in to your account and withdraw your non-Safeguard lending offers before 5 August 2013. Find out how to withdraw a non-Safeguard offer in our help section.
Updated Zopa Principles
An updated version of the Zopa Principles will come into effect from 5 August 2013. You can read the updated Principles on the Zopa site. In addition to the changes concerning Safeguard lending outlined above, the Principles reflect other new features that Zopa will be introducing over the coming months:
- Improving Rapid Return This will help savers to transfer loans that have an interest rate below the current tracker rates. Find out more in our Rapid Return FAQ.
- Launching loans to small businesses Savers will lend to small businesses through their Safeguard offer and benefit from the protection offered by the Safeguard fund. The Department for Business, Innovation and Skills will be providing investment to lend to small businesses on the same terms as Zopa savers. Find out more on our business loans blog.
We will keep you posted on any further developments.