Zopa Launches in US with Credit Union Partners

“A revolution is underway in financial services,” said Douglas Dolton, Chief Executive Officer of Zopa. “In countries around the world, there is tremendous excitement over a new class of peer-to-peer financial products that connect people together in mutually beneficial financial relationships. With today’s launch, we’re bringing US borrowers a less expensive unsecured personal loan, and US investors a safe way to make returns and help others in the process.”

Zopa takes traditional borrowing and lending and turns them into social finance tools—where consumers can achieve their financial goals and at the same time help other people.

Borrowers obtain unsecured personal Zopa Loans, with substantially lower rates than credit cards or loans from big banks. Borrowers not only get a great rate on their loan, but are encouraged to publish a personal profile that contains details about their situation and the reasons they are borrowing. That profile is designed to be shared with friends, family, and colleagues via the Zopa web site, other social networking sites like Facebook and MySpace, or on a consumer’s own blog. The more people who see that profile, the more “help” a borrower is likely to receive, and the lower their loan payments will become.

Investors, by purchasing a Zopa CD, become “helpers”. They pick at least one borrower to help and, by adjusting the rate on their Zopa CD, they can increase the amount of “help” they contribute to their borrower(s) in the form of a credit towards the borrower’s monthly loan payment. In this way, investors can help other people while still enjoying an attractive, guaranteed, and insured return. Whether a borrower repays their loan on time has no effect on the investor’s rate of return on their Zopa CD.

“These products are industry firsts,” said Scott Pitts, Managing Director of Zopa. “They offer better rates, a direct, person-to-person connection, and absolutely no investment risk for consumers. With Zopa, consumers can help others at the same time they help themselves.”

Zopa CDs and Zopa Loans are only available to members of Zopa’s credit union partners. Consumers who are not already a member of these credit unions can easily sign up online as part of the Zopa experience. Zopa’s launch partners are among the largest and most sophisticated credit unions in the country. They include:

• Addison Avenue Federal Credit Union
• Affinity Plus Federal Credit Union
• First Technology Credit Union
• FORUM Credit Union
• Provident Credit Union
• USA Federal Credit Union

“Credit unions and Zopa are a natural fit,” said Wade Lagrone, Chief Marketing Officer for Zopa. “We both believe in the power of people helping people as a way to reshape financial services. Our partner credit unions, which are known for innovation and sound management, were quick to see the potential of our new technology.”

Zopa created the first social finance offering in the world, with the March 2005 launch of its online peer-to-peer lending operation in the United Kingdom. Built from the ground up around the idea of safety, Zopa has always emphasized the importance of professional underwriting and a host of other safeguards. These precautions have led to some of the lowest bad debt rates in the industry.

“In the U.S., we’re taking Zopa’s traditional focus on safety and improving on it to meet the demands of U.S. consumers,” said Dolton. “As we expand around the globe, Zopa will continue to emphasize safe, compelling social finance offerings tailored for each marketplace.”