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Thursday, 2 November 2006

A possible alternative to Prosper.com - Zopa

Zopa (Zone of Possible Agreement) is another peer-to-peer online investment"> system similar to Propser.com. Zopa is currently operational in the UK, and intends to launch in the US soon.

Exact details of how it will work in the USA aren't available yet, but the UK version has a different slant to lending compared to Prosper.com - rather than bidding to lend a certain amount to a particular borrower at a rate, with Zopa you pick a term and market (credit risk group) to lend some money to, and pick a rate that you'll accept. Lenders in that term/market will then accept loans at the lowest available rate - so if your offered rate is the lowest available it will be taken up by borrowers. The UK version doesn't let you pick particular borrowers to lend to, but also seems to automate the diversification process better than Prosper.com

It will be interesting to see how Prosper.com and Zopa do in the long run.

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