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Zopa launches social lending feature

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Zopa, still (it would appear) the world’s first peer to peer online lending service, has launched Zopa Listings, allowing individual borrowers to post their own specific requests for loans for individual lenders to review and then bid against.

Zopa already has a Markets product where lenders meet borrowers. The new Zopa Listings (to be found here) allows individuals to ‘pitch’ online for the loan they want, giving details of what they are borrowing for, the interest rate they are seeking and their own personal circumstances. Lenders then choose between these individual borrowers and bid, eBay-like, to lend to them, offering an amount and the interest rate they are prepared to lend at. A listing can include photographs and (eventually) a video. When the listing closes, if the full loan amount has been achieved and the borrower is happy, it will go ahead at the aggregate interest rate of all the offers. If the amount is not achieved, the process stops there, although the borrower will have the chance to re-list. Lenders can bid with a lower interest rate offer to any listing that has yet to close, even if the loan amount is fully covered – keeping the competitive process live until the very last moment.

Zopa hopes that the bidding process will create competition amongst lenders to offer the best rates they can, creating a more efficient loans market. Charges for the new service will be the same as the existing Zopa Markets – successful borrowers pay 0.5% of the value of the loan and lenders will pay 0.5% of the value of their loans per year, as an annual charge to Zopa. There are no other charges.

This ‘Social Lending’ approach is likely to appeal to the Facebook generation, used to seeing these kinds of pathetic cries for attention… sorry, I mean witty requests for cash. The key thing here is that borrowers get to tell their own personal story in all its glory, tugging at the heart-strings of potential lenders. Heard of irrational exuberance? You ain’t seen nothing yet.

“New nursery needed for little tike” already has 3 offers for its £4,000 loan (since when did a lick of paint for the spare room cost that much?), while the “New internet venture seeks financial help” listing has had two offers (at a 7.4% rate) for its £2,000 loan request. I don’t hold out much hope for its chances.

However, I do quite like the personal touch in all this. Plus, Zopa plans to keep it from getting too silly (e.g. Mid-life crisis journo wants a Harley’). All would-be borrowers who want to post a listing will be vetted to ensure they are “credit-worthy, prime market borrowers.” This will help to protect Zopa lenders. And Zopa, presumably.

Giles Andrews, managing director of Zopa UK says: “Social Lending can be a better alternative for people seeking to borrow, or to find a more attractive return on money they have saved. Zopa Listings adds new levels of individuality, personal control and choice, extending the appeal of this innovative alternative to the banks even further.”

There may be something in this. We are constantly told by ‘marketing experts’ that we’ll eventually be trusting our social network above all else, so mashing this up with a lending system could well be the way of the future. It can’t be worse than the Northern Rock debacle

  • http://blog.newscred.com Shafqat

    Hilarious post. I don’t really see the value add here, but I guess if you build enough social features, they will come. The only thing they are missing is a Zopa Platform. Hmmm…

    BTW, some great new listings just added. My favorite is titled ‘Shortsighted Optician’, a man who has >100K gross salary, half million dollar house, owns a VisionExpres franchise but still needs 5K to pay taxes. The best part: he “indulges in wine, women, and song.”

    Shafqat

    • vikki

      i think you are not happy with the fact that people should get benefit via zopa ,indeed few people will try to take advantage of ZOPA and I see ZOPA as open threat to big banks ,God bless ZOPA and their lenders.My bank declined my loan simply they want to take advatnage of recession and offerring me loan at much high rates ,even I have excellent credit history.
      Zopa come to rescue me !!!

  • http://www.operationbootstrap.com Jack

    There is a something similar called Lending Club (www.lendingclub.com) but I think that this is mainly focused on its Facebook app.

  • http://www.broadstuff.com alan p

    Thats a lot of interesting data…better hope the privacy tech is robust.

  • http://www.openbusiness.cc/2007/10/30/social-lending-taking-next-step-in-the-uk/ OpenBusiness » Blog Archive » Social lending taking next step in the UK

    […] ’social lending’ service with the new Zopa Listings. As Mike Butcher writes in his post on TechCrunch UK, Zopa Listings allows individuals to ‘pitch’ online for the loan they want, […]

  • http://www.lafra.it/2007/10/30/deliziosi-x-lafra-ott-fuel-for-life-in-6-punti-zopa-listings-handvertising/ Simply my Blog » del.izio.si X lafra [ott]: Fuel for Life in 6 punti, Zopa Listings, Handvertising

    […] Zopa launches social lending feature (TechCrunch UK » Blog Archive) Zopa has launched Zopa Listings, allowing individual borrowers to post their own specific requests for loans for individual lenders to review and then bid against.[…]  bookmark this on del.icio.us – posted by lafra80 to zopa social lending del.izio.siXlafra – more about this bookmark… […]

  • http://www.techcrunch.com/2007/11/30/zopa-gearing-up-for-us-launch/ Zopa Gearing Up For U.S. Launch

    […] Allen Stern received an email outlining some differences between the U.S. and U.K. (which TCUK covered) versions. The key differences listed […]

  • http://jp.techcrunch.com/archives/zopa-gearing-up-for-us-launch/ TechCrunch Japanese アーカイブ » P2P融資のZopa、米上陸迫る

    […] サイト公開に関する追加の詳細としては、Allen Sternが受け取ったメールに米vs.英バージョンの違いが詳しく書かれている(TC英国版)ので、そこに列挙された主な違いを並べておこう。: […]

  • http://laigoo.com/blogs/?p=365   Zopa To Launch In U.S. by Laigoo - All In One

    […] Allen Stern received an email outlining some differences between the U.S. and U.K. (which TCUK covered) versions. The key differences listed […]

  • http://uk.techcrunch.com/2007/12/03/zopa-to-launch-in-us-and-italy/ TechCrunch UK » Blog Archive » Zopa to launch in US and Italy

    […] Meanwhile, the new listings service (a sort of 21st Century version of the begging letter, covered here), has produced £250K worth of bids in the first month of operation. Among those looking for loans […]

  • http://uk.techcrunch.com/2008/03/06/zopa-launches-in-japan/ TechCrunch UK » Blog Archive » Zopa launches in Japan

    […] March of 2005, Zopa has handled more than £20m in unsecured personal loans in the UK. It recently launched Listings, allowing individual borrowers to post their own specific requests for loans for […]

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