Zopa - A business model of our times

I came across this company Zopa (Zone of Possible Agreement) and went yes yes yes.

I my mind this is a first rate example of creativity, and people/communities coming together to do something that existing busness structures just can't facilitate.

The Guardian says

A new company - based in London not Silicon Valley - has decided to take on the biggest oligopoly in the world, the banks. Called Zopa (Zone of Possible Agreement) the new company is an amalgam of a number of business philosophies. It is where eBay meets credit unions by way of easyJet, the peer-to-peer movement and Betfair.

The business model is fascinating, and also the notion of transparency which is lacking within financial institutions.

Zopa even has its own blog

And this is how Zopa expains itself

Here's the way the world works (and it must be right because it's been like this for hundreds of years...) People who have spare money give it to a bank. Banks then do whatever they like with it. Some of it they lend to people who need to borrow. Some of it they give to their shareholders. Some of it they gamble on the price of tin, or the dollar going down, or whether there'll be floods in Asia. Banks make lots of money from all this, a fraction of which they give back to their customers.

Zopa though lets people who have spare money to lend it directly to people, like them, who want to borrow it. No bank in the middle, no huge overheads, no unethical investments.

To minimise any risk, the money each lender puts in is spread amongst at least 50 borrowers (and likewise each borrower gets their money from a number of different lenders).

Zopa is, therefore, for people who want to be a part of something new. Who want to join a community of like-minded individuals and lend to them and borrow from them in a trusting but secure way.

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.

So good luck Zopa, Tomi and I hope that your venture is a success to demonstrate that communities can truly dominate brands. We love your theory that

people are better than banks