You have a contract directly with the borrowers, not with the institution. If the borrowers don't pay up, you loose that money. Zopa doesn't pretend that you have money sitting in a vault somewhere that you can take out whenever you like.
To be fair to banks they don't really try to push that vault myth either, but that is the mental model people still use when interacting with banks.
To be fair to banks they don't really try to push that vault myth either, but that is the mental model people still use when interacting with banks.