Wednesday, September 27, 2006
paper stocks off the block
Any industry making a huge profit margin off its customers is a good candidate for disruption. Banking is a classic case -- just think of the 19 percent interest you pay on credit cards and the 2 percent you earn on your savings account.
Zopa is closing that gap by using the Web to allow personal lending on a massive scale. The startup was the first company to introduce peer-to-peer lending in the United Kingdom 18 months ago and is about to launch in America.
"What Skype did to telecoms, this could do to banks," (...)
The idea is simple. People join Zopa online as either borrowers or lenders. The lenders proffer money not to individuals but to a pool of people grouped together because of similar creditworthiness. Zopa assesses the credit risk of the borrowers, pools the capital, and matches consumers who need money with consumers who want to lend it. Since Zopa is not technically a bank and doesn't lend money itself, the capital requirements to run the business are relatively small...
[the same business model (more or less) here]
tarted by ---gallizio
in the coin-hanger era