P2P 4th Way Analyst Removes Zopa Ratings
The 4th Way peer-to-peer lending analyst has stopped providing ratings for Zopa, saying his submissions are too sporadic.
The analyst assigns a Plus rating out of three based on an assessment of the returns offered by a lender and the risk of losses.
Its objective is to give potential P2P investors an idea of the risk and returns available on the platforms.
They are rated only if they provide regular data and grant new loans as well as if they have sufficiently long experience.
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The world’s oldest P2P lender previously had an “outstanding” rating of three out of three, but is no longer rated.
“(Zopa) provides a full picture showing the record of every loan approved too sporadically for us to do all of the research and data voracity checks we do today,” 4th Way said.
“If we regularly receive data, we have more opportunities to spot errors, inconsistencies or manipulation of the data, and we can make better loan models.
“Regular data submission is therefore a basic requirement that all P2P lending companies must adhere to in order to maintain a 4thWay Plus rating. “
Zopa is always accepting new investors and granting new loans.
“We provide detailed data to our investors that gives them a dedicated overview of all of their individual loans and the performance of their entire loan portfolio,” a statement from Zopa said.
“We also provide them with regular updates on our overall performance.
“All of the external disclosures we provide are in accordance with FCA recommendations. “
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There are several other P2P lenders that are unrated due to lack of information, including Relendex, Rebuildingsociety, and ArchOver.
4th Way claims unrated platforms can still offer “exciting opportunities” but require a “greater level of attention to detail”.
Lending Works and LendingCrowd have been removed from the list because they are not currently making new loans.
RateSetter is no longer rated and 4th Way said Funding Circle’s rating was removed in 2018 when it stopped providing data, which coincided with when it became a public company.
Proplend, Kuflink, CrowdProperty and Assetz Capital are among the lenders with “exceptional” ratings of three out of three.