Zopa

Zopa is a P2P money lending service that allows lenders and borrowers to deal directly with one another, cutting out the banks who act as middlemen. It works in the following way: the company first categorizes borrower credit grades with an A*, A, B, C, or Y rating; then lenders make offers that vary by money amount and time period for persons with a certain credit grade, and borrowers can then agree the aggregate offered rate. Zopa takes on such responsibilities as distributing money between parties, completing the legal paperwork, performing borrower identity/credit checks, and employing a collections agency that chases missed payments for the lender. Zopa also mitigates risk for lenders by enforcing monthly direct debit repayment, making borrowers sign a legal contract, and allowing lenders to lend small chunks of money to individual borrowers (i.e. someone lending £1000 would have their money spread across say, 100 borrowers). The company itself makes money by charging a fixed fee for borrowers and a 1% annual fee for lenders. Zopa has received public acclaim as well, having been awarded CNET Technology Awards' 2006 Internet Innovation of the Year, the 2007 Webby Award for Best Banking/Bill-Paying Website, the 2008 Webby Award for Financial Services, the Banker 2007 Award for Best Internet Project, and Moneywise 2009 Awards for Best Customer Service and Best Personal Loan. One of the three initial members of the UK's Peer-to-Peer Finance Association, together with FundingCircle and RateSetter. Other P2P lending services include [Lending Club](http://www.crunchbase.com/organization/LendingClub), [Prosper](http://www.crunchbase.com/organization/Prosper), and [Kiva](http://www.crunchbase.com/organization/Kiva).