Peer-to-peer lender Zopa agrees partnership with Metro Bank

* Partnership first of its kind in Britain

* Metro Bank has already begun lending through Zopa

LONDON, May 19 (Reuters) - British peer-to-peer lender Zopa has agreed a partnership with Metro Bank that will see the bank lend funds through Zopa's online marketplace, the first arrangement of its kind in the UK.

Metro Bank, which became Britain's first retail bank for over a century when it launched in 2010, will lend millions of pounds to British borrowers each month through the Zopa platform, the companies said.

"This unique partnership is the first of its kind in the retail banking sector and a clear sign that Zopa is a trusted platform not only for consumers but also for institutions to deploy their funds," said Zopa's co-founder Giles Andrews.

Peer-to-peer lending has grown rapidly in Britain since the 2007-9 financial crisis, providing an alternative source of finance to individuals and small firms as banks cut back on lending to focus on meeting tougher regulatory demands.

Zopa became the first peer-to-peer lender in Britain when it opened in 2005, acting as an online broker between individuals looking to borrow or lend and organising more than 750 million pounds in lending since its launch.

Several others peer-to-peer lenders have since emerged, including Funding Circle and RateSetter.

(Reporting by Matt Scuffham, editing by Louise Heavens)