Zopa is a UK-based company providing an online money exchange, allowing people who have money to lend to offer it to those who wish to borrow, instead of using savings accounts and loan applications at traditional banks. The process is sometimes referred to as peer-to-peer lending. Zopa acts as the man in the middle operating the markets, in the UK taking a fee of £94.25 from each borrower for each loan they take out or from lenders a fee of 0.5% a year of the money they have currently lent out.
Launched in 2005, Zopa is led by a management team that comprises many of those that founded Egg in the UK. The company is based in London and backed by Benchmark Capital and Wellington Partners.
Zopa operates within the United Kingdom, United States, Italy and a service is being developed for Japan. Each geographical area operates a slightly different model.
The name, Zopa, stands for Zone of Possible Agreement, a negotiating term identifying the bounds within which agreement can be reached between two parties. The idea for the service was identified following extensive socio-economic research which itself identified a group of individuals, coined Freeformers.[1] Freeformers were identified as displaying different attitudes towards many aspects of life, including their money
In 2006 the Social Futures Observatory published a study titled Internet Based Social Lending.[2], which seeks to understand the antecedents of Social Lending, drawing parallels with Friendly Societies, and using Zopa as a major source of case study material.
Variously likened to eBay and Betfair in the UK press, Zopa is an addition to the emerging group of peer-to-peer services enabled by the internet. Prosper is a similar service based in the US.
