Zopa -a new banking model
Zopa - The first lending and borrowing exchange. Its a site that enables peer to peer lending.
They have an interesting model of banking. The typical banking model is for people to deposit their money in a bank and the bank then lends that money to other people, making tons of money by charging a high interest rate for the borrowers and providing a much lower rate for the depositers.
Zopa, on the other hand, connects lenders and borrowers directly. Done completely online, they ensure that your lending is spread across lenders to reduce the risk. They do the background and credit check of the lenders. They make money for themselves by taking a 1% cut.
Going by the Business 2.0 article, this service would be the equivalent of Skype for banking. Not that with the proliferation of this model banks would be out of service. For now, this service helps people get loans with low interest rate while also providing an alternate investment option. Banks, on the other hand, provide a whole gamut of service not convered by this model.
This service, in fact, is very similar to the money-lending co-op programs set up in some villages in India. Those co-ops free the people from the clutches of the high-interest charging local money lenders. The co-ops get the money to lend from the members who contribute when they have a surplus, and then provide loans through the co-op to their neighbours and fellow villagers.
CircleLending is another website I frequently hear on radio (in the form of ads) that specializes in managing loan transaction between relatives and friends. I have'nt explored this service much, but would be interesting to find more about them.
Prosper is another website that provides an online marketplace for people-to-people lending.
They have an interesting model of banking. The typical banking model is for people to deposit their money in a bank and the bank then lends that money to other people, making tons of money by charging a high interest rate for the borrowers and providing a much lower rate for the depositers.
Zopa, on the other hand, connects lenders and borrowers directly. Done completely online, they ensure that your lending is spread across lenders to reduce the risk. They do the background and credit check of the lenders. They make money for themselves by taking a 1% cut.
Going by the Business 2.0 article, this service would be the equivalent of Skype for banking. Not that with the proliferation of this model banks would be out of service. For now, this service helps people get loans with low interest rate while also providing an alternate investment option. Banks, on the other hand, provide a whole gamut of service not convered by this model.
This service, in fact, is very similar to the money-lending co-op programs set up in some villages in India. Those co-ops free the people from the clutches of the high-interest charging local money lenders. The co-ops get the money to lend from the members who contribute when they have a surplus, and then provide loans through the co-op to their neighbours and fellow villagers.
CircleLending is another website I frequently hear on radio (in the form of ads) that specializes in managing loan transaction between relatives and friends. I have'nt explored this service much, but would be interesting to find more about them.
Prosper is another website that provides an online marketplace for people-to-people lending.
posted by d'na | 11:06 AM
1 Comments:
Sounds pretty cool and it's a nice alternative for villagers who often resort to borrowing from loan sharks and having to pay back with horrendous interest.
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