Zopa.com. It's lending without the banks

Zopa is social lending brought to the masses. The principle is no different from a 12 year-old kid asking her parents for 10 bucks to go to the movies, but the implications are much wider-ranging. Through the very pretty Zopa website, individuals can borrow from other individuals, much like the earlier profiled micro-lender Kiva.org. Unlike, Kiva, Zopa facilitates big loans in the same way that banks do, only with much lower interest rates. Spreading the risk over dozens of lenders, a £5,000 loan over 3 years would brook 6.38% interest as compared with high-street banks rates of 8.7%-14.9%. It’s also a good deal for lenders who can dictate the rates and risk they’re willing to take, making an average of 6.75%. Rather than feed the bloated banking industry, paying a 0.5% fee to Zopa seems like a good idea. Unfortunately Zopa is only working in the UK at the moment, although they do have plans to open in the US soon.

*Redjoe says: “For a comparable US based site that aims to democratize the banking industry try www.prosper.com"

posted by Alex Herder on 10 April 2007
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  1. For a comprable US based site that aims to democratize the banking industry try www.prosper.com.

    — Redjoe · Apr 10, 03:11 PM · #

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