Zopa and Equifax Forge New Partnership - AltFi News
Zopa has appointed Equifax, the consumer and business insights “During our long-term relationship we have always been impressed by the. Equifax is set to provide peer-to-peer lender Zopa with “deeper “During our long-term relationship we have always been impressed by the. Equifax has extensive experience of the P2P sector. Its in-depth understanding of our business needs, coupled with the strength of its data.
Savvy capitalists have already been established in Korea and the have been keen on Zopa from the beginning. These were defined as self-employed, project-based or freelance workers who were not in standard full-time employment. Lenders could see how much had the lenders were supplying the money, so each been borrowed, at what rate, and for what period of lender received the rate of return they asked for.
This was the reverse of banks, revealed that many of its lenders and borrowers where lending typically became progressively were united by a desire to distance themselves from cheaper for larger amounts over longer periods. Zopa looks at the credit scores of people 4. Borrowers enter into legally binding contracts to lend this much to A-rated borrowers for this with their lenders.
Borrowers repay monthly by direct debit. Borrowers review the rates offered to them and repayments are defaulted, a collections agency accept the ones they like. If they are dissatisfied uses the same recovery process that the High with the offered rates on any particular day, they Street banks use.
While waiting for their money to offer. Moreover, through its low-cost structure, Zopa be lent out, lenders earn 3. In parallel, Zopa charges borrowers a fee of 0. Zopa deducts the fee from the that they are truly helping others in need.
Zopa also earns money that can be illustrated and comprehended quickly. Zopa has developed a value innovation in the At the end of NovemberZopa had 40 financial services industry, but will the company be employees: Red Herring reported in that the helped us address this crucial question.
Barney classifies firm resources into three categories: In an industry and equipment, geographic location and access to like banking, which has a highly established way of raw materials. Human resources include training, doing business, Zopa offers value by managing experience, judgement, intelligence, relationships transactions differently.
Zopa adds value to and insights of individuals in a company. Compared to proprietary products and imitate, and 4 difficult to substitute. For example, a first mover might possess a the long term, the answer is less clear.
Yet assets underpinning its business model. It could, an assessment of the overall Zopa model — from a conceivably, seek to establish exclusive partnerships resource-based perspective — raises questions about or alliances with other firms, such as Google or the long-term sustainability of its competitive Yahoo, but the rationale for other firms in entering advantage.How relationships can affect your credit score
To us, many of the resources possessed into such an alliance at the exclusion of other such by the company appear to be easily replicated by a partnerships is questionable. Zopa is for people who are looking for a better rate of return. Zopa's interest rates aren't squeezed by middlemen the banks because there are no middlemen - that's the Zopa idea.
Zopa is for creditworthy people who earn money in new ways, in ways that banks don't always recognise. People who are self employed, people who have peaks and troughs to their income, people who would be invisible to a bank's credit rating system but are seen and validated by Zopa's. Borrowers must submit to being credit-checked by Equifax, and to having the results made publicly available on their profile.
The funds are then reserved and after more checks with credit reference agencies the loan is approved by Zopa. Zopa lenders first transfer the amount they wish to lend into their Zopa holding account. This is a segregated account which is operated by Zopa and specified as containing money owned by Zopa members.
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Zopa provide information - including market data and expected levels of bad debt - to help lenders choose their terms. Lenders will also earn 4. Members who have not lent or borrowed with each other are only identified on the site by their nicknames. If you have lent money, you will find out the real names but not any of their contact details of your borrowers on the quarterly statement. If you have borrowed money, you will see the real names but not any of the contact details of your lenders on your loan contract note.
Zopa makes money by charging lenders and borrowers a fee. It charges borrowers 0. Zopa has received credit licenses from the Office of Fair Trading. Everyone looking to borrow is credit-checked and risk-assessed by Equifax, and people judged not credit-worthy will be prevented from borrowing at Zopa.
Lenders are encouraged to diversify risk by spreading money across a range of borrowers. In the event of a total business failure, the loan agreements still stand because Zopa is not a party to any loan contracts; it only provides the mechanism for agreeing them.
The repayments will continue to be collected by a collections agency that is appointed by Zopa lenders to collect missed payments.
The costs of collections activity will not vary if Zopa has failed. Zopa also have a number of online and offline procedures to catch unusual or suspicious behaviour on the site and can immediately suspend the membership of anyone whose intentions do not look completely honourable. These procedures are not elaborated. The forced diversification and lack of meaningful contact between lender and borrower may mean that users could feel somewhat estranged from one another.
The bond is ultimately legal and not social — the devices for reclaiming money are drawn from the banking industry, such as risk evaluation and collection agencies. The potential social aspects of the service are not exploited to the same extent as they are in competing services such as Prosper since personal interaction is not of great importance to the model.
Zopa was launched in March by several people with previous experience in financial services.
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It is the first person to person lending and borrowing community in the UK Press Release, 7 July Zopa has over 85, members Zopa,and since its launch in MarchZopa has secured for its lenders a gross return of 6.
Furthermore, Zopa is backed by Benchmark Capital, the venture capital firm that supported eBay Zopa, Zopa is also based on a similar peer-to-peer model of eBay. Writing about peer to peer lending Goundon claims that Social Lending establishes a model of exchange which is not based on financial gain at the expense of others. Thus, Zopa markets itself on two axes; financial competitiveness and its social and ethical orientation. It claims both to provide consumers with a socially rewarding investment or loan Ensor, and to offer a better financial return in comparison with mainstream banks.
Zopa would claim that by combining a better interest rate to borrowers and a better return for lenders and a more community based approach, Zopa is essentially reinventing a model of friendly societies claiming to provide a more social and ethical financial service closely allied with mutual gain.