Zopa ‘Social Finance’ community launches in USA and Italy

Having successfully launched the world’s first peer-to-peer lending service in the UK, Zopa today becomes the first global business, with launches in the USA and Italy.

As the world’s banks continue to struggle with the credit crunch, Zopa takes the peer-to-peer ‘social finance’ model global with launches in the USA and Italy.

Douglas Dolton, CEO of Zopa said: “A revolution is underway in financial services. In countries around the world, there is tremendous excitement over a new class of peer-to-peer financial products that connect people together in mutually beneficial financial relationships. With today’s launch in the USA and Italy, we’re bringing borrowers in these countries a less expensive unsecured personal loan, and investors in these countries a safe way to make returns and help others in the process.”

Although Zopa’s service in each country is tailored to that territory’s consumer preferences and regulatory environment, all Zopa operations take traditional borrowing and lending and turn them into social finance tools, where consumers can achieve their financial goals and at the same time help other people.

Zopa USA -

Available at us.zopa.com, the American version of Zopa offers a unique version of ‘Social Finance’ designed to fit the US market, with a much greater emphasis on safety than existing competitors in the USA:

Borrowers obtain unsecured personal Zopa Loans, with substantially lower rates than

credit cards or loans from big banks. Borrowers not only get a great rate on their loan, but are encouraged to publish a personal profile that contains details about their situation and the reasons they are borrowing. That profile is designed to be shared with friends, family, and colleagues via the Zopa web site, other social networking sites like Facebook and MySpace, or on a consumer’s own blog. The more people who see that profile, the more “help” a borrower is likely to receive, and the lower their loan payments will become.

Investors become “helpers”by purchasing a Zopa CD (Certificate of Deposit)*. They pick at least one borrower to help and, by adjusting the rate on their Zopa CD, they can increase the amount of “help” they contribute to their borrower(s) in the form of a credit towards the borrower’s monthly loan payment. In this way, investors can help other people while still enjoying an attractive, guaranteed, and insured return. Whether a borrower repays their loan on time has no effect on the investor’s rate of return on their Zopa CD.

“These products are US industry firsts,” said Dolton. “They offer better rates, a direct, person-to-person connection, and absolutely no investment risk for consumers. With Zopa, consumers can help others at the same time they help themselves.”

Credit Union partnerships

Zopa CDs and Zopa Loans are only available to members of Zopa’s credit union partners. Consumers who are not already a member of these credit unions can easily sign up online as part of the Zopa experience. Zopa’s launch partners are among the largest and most sophisticated credit unions in the country.

Zopa Italy -

In Italy, the Zopa model looks far more like that of the UK, with a more direct relationship between borrowers and lenders.

As in the UK, Zopa’s emphasis on safety is delivered through careful assessment of individual borrowers’ credit risk and the affordability of the loan they are seeking, along with all lenders’ money being spread across at least 50 borrowers.

Zopa in Italy is available at italy.zopa.com.

Zopa UK -

Meanwhile, Zopa in the UK continues to go from strength to strength. Launched in March 2005, it now has more than 180,000 members.

In the UK, Zopa offers two versions of its service. The original, core ‘Zopa Markets’ and the recently launched ‘Zopa Listings’ service.

Although Listings was launched only a month ago, the service is proving very popular already amongst both borrowers, who post a more personal pitch for the loan they are seeking, and lenders who then bid competitively based on the information Zopa and the borrowers provide

In just the first few weeks of Listings being live, more than 500 lenders have bid more than £300,000 and almost all Listings have secured the loan they were seeking.