In an update on their blog today, Italian P2P lender Zopa Italia has announced that the site will not relaunch until October or later. Zopa has been working on the establishment of sub-accounts for lenders as part of an agreement with the Bank of Italy, and is pushing the relaunch date out now that they have more details on the technical integration issues involved.

In today’s announcement, Zopa named banking partner IMEL.EU (European Institute of Electronic Money), specialists in electronic funds transfers, who will hold a separate account for each lender before loans are disbursed to borrowers. The regulatory and technical integration of the parties has turned out to be much more involved than what Zopa initially expected, and the relaunch date is uncertain. Zopa has promised to provide an update by mid-October at the latest.

Zopa Italy borrowers and lenders are understandably upset, wondering whether the cost of the Bank of Italy’s request will require new fees or tariffs. The most biting criticism comes from Mario, still angry at the Bank of Italy’s initial intervention, who wonders how Italian regulators can focus on the straw in Zopa’s eye while the beam of the credit crisis is lodged in their own.

Zopa Italy’s main social lending competitor, Boober Italia, has also suspended new user registrations and has posted a message on their web site stating that they are investigating actions by the Bank of Italy. Boober claims these actions “have nothing to do with P2P lending at Boober.it”, but that is a dubious claim given Boober’s aggressive actions to curtail site activity.

Related posts:

1. Zopa Italy Reaches Agreement with Bank of Italy; Service to Resume in September
2. Zopa Italy’s License Cancelled by the Bank of Italy (Updated)
3. Prestiamoci: P2P Lending The Italian Way, Coming in September

Zopa’s proposed solution to the “transit lender account” issue is to create an electronic sub-account for each lender individually, in which loan funds would sit until they are actually paid out to borrowers. Apparently the Bank of Italy has accepted this proposal, and Zopa will spend the next month or so doing the technical development required to enable it. This puts a Zopa Italy relaunch sometime in mid-September. In the meantime (and since the shutdown), existing loans will continue being serviced.

A funny cultural detail from Zopa’s email is how often they mention the month. As anyone who’s ever summer backpacked through Europe knows, Italy shuts down in August. And although most countries (even the industrious US) have slow Augusts, taking some time off (or all your time off) in August is sacrosanct in Italy. So Zopa opens the email by patting themselves on the back for working through the holiday: “Even though we are halfway through August, we are working with maximum effort to bring Zopa back.” Now that they have reached agreement with regulators, though, Managing Director Maurizio Sella adds a note that the Zopa offices will be closed for a well-deserved break from 17-23. At least there wasn’t a strike…

All in all, a 2-month shutdown is much better than the 6- and 9-month shutdowns suffered by LendingClub and Prosper, respectively. But it would be nice if regulators would take the time to understand what they are approving before they give the green light. Nothing interrupts the momentum of a startup in a new market segment like a full suspension of their business.

Related posts:

1. Zopa Italy’s License Cancelled by the Bank of Italy (Updated)
2. Corrected: Zopa Italy Relaunch Delayed
3. Prestiamoci: P2P Lending The Italian Way, Coming in September

In Kiva’s July newsletter, they promoted a video called “If I Had $25“, a play on the Barenaked Ladies hit “If I Had $1,000,000“, created by johnbr2, a musician from Decorah, Iowa:

The song is both Kiva-accurate (buying yaks and looms), well-sung, and hilarious. An interlude that discusses the “cultural imperialism” of Kraft dinner is particularly funny.

Among the highest-quality user-generated content, Zopa Italy takes the cake with entries from their Zopacontest, held in November 2007 to promote the upcoming launch of their site. Many entries are professional and captivating, but the winning entry went to Silvia Casali for her beautiful animation:

Lending Club’s video contest back in 2007 to promote the fledgling Facebook-based site yielded a bunch of entries, and the first place, $3,000 winner was the well-produced “Teddies” video, featuring a small-businessman-with-medical-bills storyline. Among the lot of excellent videos was one without fancy production value, but lovable in its honesty, titled “The Worst Entry For The Lending Club Video Contest“:

Back in 2007 a song entitled “Prosper Panhandler song” was posted by an artist called Underwater Bass Player. The bluesy ballad focuses heavily on Prosper’s now defunct user forums, and in the song, the author agonizes over which Prosper group to pick before eventually settling on one called “Everyday People“:

What other good social media have you seen related to P2P lending? Share it in the comments.

Related posts:

1. Zopa announces launch of Zopa Japan
2. Zopa US – the boy who cried wolf
3. Prosper Hosts Twitter Gimmick To Draw New Customers

Zopa entra in standby

In data 10 luglio 2009 è stato notificato a Zopa il decreto del Ministero dell’Economia e delle Finanze che, su indicazione di Banca d’Italia, ha cancellato dall’elenco degli intermediari finanziari ex art. 106 la nostra società. Come conseguenza immediata ci vediamo costretti a sospendere la trattazione di nuovi prestiti e l’ingresso di nuovi Prestatori.

La società sta valutando tutte le iniziative, anche di natura giurisdizionale, per tutelare la propria posizione e la community. Vi terremo informati su tutte le attività che metteremo in atto per salvaguardare un’iniziativa innovativa, etica, sociale e vantaggiosa per tutti i partecipanti.

Which the Zopa UK blog has translated into:

On 10 July 2009 Zopa Italy was notified of the cancellation of its licence to operate as a financial intermediary (106) by the Ministry of Economics and Finance, by indication of the Bank of Italy. As a consequence Zopa Italy has stopped issuing new loans and accepting registration of new lenders. The company is evaluating all initiatives, even at judicial level, in order to protect its position and its community. Zopa Italy will keep you informed on all activities put in place to safeguard an innovative, ethical and social initiative that bring benefits to all participants.

Zopa is not giving any further detail on why their license was revoked (perhaps even they do not know see “Update” below), but the Zopa UK blog post mentions a recent inspection by the Bank of Italy. Apparently the outcome of that inspection was some issues that Zopa should address, but the notice of cancellation arrived “without further discussion”.

Zopa Italy will continue servicing loans during this suspension period. Zopa, who has funded over 7.1 million Euro ($9.9 million USD) in loans since their launch in November 2007, is the leader in “prestiti personali” (P2P lending) in Italy, with about 10x the loan volume of competitor Boober Italia. Boober, which is a subsidiary of Italian financial services provider Centax, and is also regulated under the Bank of Italy, has no indication on its site that there are any issues.

As we have seen in recent years in the US, a lack of government regulation can put an economy in great peril. But misguided and overbearing regulation can be equally damaging of progressive and innovative business models. In the world of P2P lending, we have seen Lending Club, Prosper, Boober (NL), Loanio, and IOU Central all close their businesses (or suspend them, at least) due to the action of government regulators. We hope that Zopa Italy’s suspension doesn’t last long.

Update: A spokesman for Zopa Italy has given us more information about the shutdown order. The Bank of Italy has accused Zopa of operating as a bank without a license. Zopa maintains that they are just intermediating payments between private parties, but the issue hinges on Zopa’s “transit lender account”, where lender money is held before it goes out in loans, and which would qualify Zopa as a banking institution. According to Zopa, the transit lender account does not earn interest, and is not counted among the assets of the corporation. Zopa has proposed an alternate solution to the issue, but apparently the Bank of Italy has decided to shut everything down before proceeding.

This points out yet another problem with government regulators, which is that, in general, they don’t take the time to understand new concepts before greenlighting them in the first place. Zopa had authorization from the Bank of Italy before launching Zopa Italy in the first place, and most likely that “transit lender account” was in place from the beginning. Because regulators failed to fully understand the system before approving it, now they are handicapping Zopa unfairly.

Related posts:

1. Zopa Italy Reaches Agreement with Bank of Italy; Service to Resume in September
2. Corrected: Zopa Italy Relaunch Delayed
3. Prestiamoci: P2P Lending The Italian Way, Coming in September

No date has been set for the site’s launch, but Zopa follows American P2P lending company Prosper, who announced a joint venture with SBI Holdings to launch a Japanese site in August 2007. During 2007, Zopa launched sites in both the United States as well as Italy.

Related posts:

1. Prosper in joint venture with SBI Holdings for Prosper Japan
2. Zopa US – the boy who cried wolf
3. Corrected: Zopa Italy Relaunch Delayed

The differences between a Zopa listing and a Prosper listing are few. Zopa has adopted a similar set of features for listings, including:

• Pictures
• Description
• Friends
• Endorsements
• Questions & answers
• Public bid history

One of the only differences is that Zopa listings are active for 12 days by default, whereas Prosper offers 3, 5, 7, and 10 day options. One of the complaints from Zopa members who commented on the new design was that he didn’t like the idea of tying up his funds for 12 days waiting for the auction to end.

Kudos to Zopa for soliciting feedback on the upcoming feature in advance, although they could have done a better job of cleaning out any Prosper artifacts that were still in their mockups. For example, the “Funded/Forecast” graph that’s prominent on Prosper listing pages is also shown prominently on the Zopa listing mockup.

We’ll see if Zopa makes changes based on member feedback as they develop and release this feature over the next few months. This may be the feature that allows Zopa to follow through on their long awaited launch in the US market, which is slated for some time this fall.

Related posts:

1. Zopa wins Webby for Banking/Bill Paying
2. Zopa announces launch of Zopa Japan
3. Zopa US – the boy who cried wolf

Kudos go to design agency Poke out of London, who created the award-winning design for Zopa’s redesigned site, which launched in late 2006.

Related posts:

1. Zopa planning to introduce borrower listings
2. Zopa US – the boy who cried wolf
3. Virgin USA acquires CircleLending, enters US banking market

1. Crossing the Pond - Jan 2006, launch estimated for “early this year (2006)”, later revised to “Q2 2006″
2. Zopa raises $15m for US launch - Mar 2006, launch estimated for “later this year (2006)”
3. Zopa revises plans for U.S. debut, will start with national service - Apr 2007, launch estimated for “later this year (2007)”

Let’s hope they pull it off sometime this decade…

Related posts:

1. Zopa announces launch of Zopa Japan
2. Zopa wins Webby for Banking/Bill Paying
3. Zopa planning to introduce borrower listings