P2P Lending Sites Affected by Credit Crisis

According to Finextra.com the UK-based P2P lending site Zopa is retreating from the US market only ten months after making its appearance on it. This is, as many have intuited, the effect of increasing global economic crisis. Finextra quotes Zopa CEO Doug Dolton as having said:

"Due to the extremely difficult consumer credit circumstances in the US, we made the decision to focus our ongoing efforts in the UK, Italy and Japan."

Zopa had claimed that the credit crisis had actually helped the company because of growing demand for non-traditional loans a few days ago. Eventually, however, its partnership with Credit Unions in the US (to deal away with regulatory issues) proved to be part of its downfall as the credit crisis had the same impact to Credit Unions as it had to any traditional bank.

Zopa had managed to raise15 million dollars to win over the US market. The fact that it so rapidly pulled out may build up uncertainties about other P2P lending operations that stand to be affected by the current movement of credit markets, a panic of insecure investments and the obvious need for more firm regulations.