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Looming Trouble For Banks?

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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