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Review: Forge a New (Human) Way of Lending with Zopa

Written by Erz on Tuesday, October 16, 2007

Who doesn’t want a cheap loan? Social lending is a new phenomenon which is creating quite a storm in the world. Borrowing and lending among friends has been going on for ages. The only difference is that this time, the money is moving among people who may not know one another and also that interest is involved. To the lender, it is another way of saving. To the borrower, it is a reasonable loan. What’s more, the interest a borrower pays is less than what a bank would charge one for a loan (as the middleman’s fee is saved).

Zopa is the pioneer in this field. While Zopa takes a small commission, this is less than what a bank would normally charge. What I feel is the greatest catalyst for this phenomenon is not just the benefits reaped through cheaper loans for borrowers and higher interest rates for lenders. It is the human element involved. I do know some people who are indignant at the widening gap between the rich and the poor. They are frustrated that huge corporations make so much every day while the poor have to battle just to get through the day alive.

Hence, knowing that they are benefitting some individual like themselves rather than a billionaire who is ferried in a limousine acts as a driving force to go the Zopa way or what some may call – the human way!

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