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Looming Trouble For Banks?

Written by Erz on Wednesday, October 10, 2007

Do you lament about the low interest rates that your saving account is providing you with? Are you afraid that your bank may be another Northern Rock? Don’t fret, enter companies such as Zopa, which is a marketplace for social lending. Instead of a bank, an individual intending to reap greater returns from savings can give a loan to another individual in need of the money. Zopa makes this possible with little risk as borrowers are credit-checked and risk-assessed and the money loaned is spread among many borrowers to further decrease the risk element for a lender. The borrower also benefits from a better rate.

Such a win-win situation may spell trouble for banks who may need to find other means to attract customers into putting their money with them. All said, the rise of borrowing and lending communities can only mean good news for lenders and borrowers!

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  1. 2 comments: Responses to “ Looming Trouble For Banks? ”

  2. By Sagem on November 12, 2008 at 6:32 PM

    You predicted the banking trouble about 1 year early..

  3. By Erz on November 13, 2008 at 6:46 AM

    Not really, just a coincidence I guess.

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