Newspaper article The Evening Standard (London, England)

The Middle Men Taking the Credit and Heading for the Top; Loan Arranger: Giles Andrews' Zopa Collects Money and Then Lends It Out

Newspaper article The Evening Standard (London, England)

The Middle Men Taking the Credit and Heading for the Top; Loan Arranger: Giles Andrews' Zopa Collects Money and Then Lends It Out

Article excerpt

Byline: Chris Blackhurst

NOW and again I come across a person with an idea that's so clever, yet simple, that I kick myself for not thinking of it first.

One such is Giles Andrews and Zopa. He and his colleagues u there were five in total when the firm started three years ago and they now number 14 u collect money in from individuals and lend it out. That's pretty much it.

Borrowers are vetted and divided into categories, with A* being the safest and D young borrowers ("creditworthy young people who have a good but thin credit history", says Andrews). Each type pays a different rate of interest. Loans are for three or five years.

To spread the risk, lenders only lend small chunks to individual borrowers. One lending [pounds sterling]500 or more would have his money spread across at least 50 borrowers. Zopa makes its profit by charging borrowers a [pounds sterling]94.25 transaction fee and lenders a 1% annual servicing fee.

So far, they've lent [pounds sterling]33 million and only 2% of loans have gone bad. …

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