Zopa users are reporting significant delays when trying to sell their loans, with the firm battling against slow speeds on its platform.
The peer-to-peer (P2P) provider revamped its product range earlier this year as it launched its first Innovative Finance Isa (IF Isa).
However, these changes have caused issues with Zopa’s processes and have increased the time it takes for customers to sell their loans to others.
Moneywise has been contacted by customers who have grown increasingly frustrated with the time it takes to cash out and sell their loans on Zopa’s secondary market.
At present, users trying to sell their loans on the site are currently told to expect delays beyond the standard 20-day sales window. The platform says: “We will continue to try and sell your loans for 20 days, but there is no guarantee that you will be able to access your money before your loans mature.”
‘I tried to sell my loans but have experienced major delays’
Moneywise reader Jonathan Yonge, who manages his own portfolio of assets for a living, is one of the customers that has been affected by the issue. He currently has around £220,000 invested in the Zopa Access product and a further £100,000 in Zopa Plus. Zopa Access has now been closed to new investors and he has been unable to sell most of his loans.
“A couple of months ago Zopa said it was going to retire some products and replace them with a different product [Zopa Core].
“As the returns have fallen, I tried to sell my loans but have experienced major delays. Some days I don’t sell a single loan. The maturity of these loans goes up to five years and liquidity is very limited.”
Mr Yonge says he entered the peer-to-per market because he expected greater liquidity than other asset classes, but this has not been the case.
“As an investor I’m reliant on the person who sold me the asset for the resale. The market is controlled by Zopa, which can change it without notice. There needs to be more competition and the ability for the loans to be sold more widely. This is a major weakness of peer-to-peer products.
“I made a mistake putting so much money in. I’ll keep trying to sell my loans but it will be around 18 months at this current rate of sale.”
Zopa confirmed to Moneywise that customers had been experiencing delays over the summer.
“Recently, some of our automated processes have been running slower than normal, resulting in it taking longer for our investors – including Mr Yonge – to sell their loans and access their money early,” a spokesperson says.
“There is still plenty of interest from our investors to buy these loans and there are no liquidity issues. We’d like to apologise to our customers who have been affected by the slower loan sale times – including Mr Yonge.”
‘Zopa has had to delay the transfer on existing non-Isa Zopa funds’
Fellow Moneywise reader John Mitchell is an existing Zopa customer and wished to transfer his holdings to its IF Isa. When the Isa product was launched, customers were told they would soon be able to sell their existing Zopa loans - without incurring a 1% sales fee – before purchasing new loans within the Isa wrapper.
Three months on, and Zopa is yet to offer these fee-free sales to its customers.
“I opened an Isa with Zopa as an existing customer,” Mr Mitchell commented on Moneywise.co.uk. “All went well and I am earning tax-free interest. But due to volume of demand Zopa has had to delay the transfer on existing non-Isa Zopa funds.”
In a statement published on the platform’s website, chief product officer Andrew Lawson says Zopa is delaying this fee-free sales period to make sure its systems can handle the expected activity.
“We would like waiting times to drop even further before we launch the rebate period on the 1% loan sale fee when selling loans into a Zopa Isa,” he explained. “As soon as we’re happy with loan sale times, we’ll let you know when the rebate period will start.”
A full report into the current state of the peer-to-peer market will be published in the October edition of Moneywise.
Have you been affected by slow loan sales at Zopa and other P2P platforms? Contact Moneywise with your story at email@example.com or comment directly below this story.