Presented by:

Abhishek Ghosh
Anjali Paswan
Sayanna Das
 Introduction
• Zopa is a UK based peer-to-peer lending company founded in 2004 which
has a banking license. It launched in the UK in March 2005. Zopa was the
first peer-to-peer lending company. 
• It aims to give people access to simpler, better-value loans and
investments.
• Since 2005 Zopa lent out over £5 billion to almost half a million borrowers
and generated over £250 million interest for their investors through the
peer-to-peer business.
• In June 2020 Zopa received their full bank license. Now Zopa can offer
people more ways to feel good about money including a credit card that
puts you in control of your spending, and Fixed Term Savings.
 Peer to peer lending
 Lending money to unrelated individuals.
 Lend money directly to a consumer.
 Takes place online

Zone of Possible Agreement

 Refers to the overlap between one person's bottom line and
another person's top line. 
  Takes place between two parties. 
  A mutual negotiation can be established.

Why Zopa
 Low rates
 No early repayment fees
 Voted most trusted loan provider
 How Zopa Works
Investment ,
Check loan Reducing and
Interest and
applicant’s credit sharing risk
Repayment period

Completing legal
Transfer the loan
Payment forms and
to the borrower
contracts
 Who can Buy and Lend

Borrowers:
• Should confirm their identities Lenders:
• Be at-least 20 years old • Should be a UK resident
• Have a good track of repaying debt • Should be aged 18 or above
• Should be a UK resident • Can lend anything from £10
• Have 3 years of residence history in UK
• Income should be £12,000 per year
 Zopa Business Model
Borrowers and lenders Lenders choose amount,
join ZOPA, undergo interest rate, loan Lenders transfers funds to
identity check and credit duration, and borrowers ZOPA account
score with specific credit rating

Borrowers select from

Borrower's re-pay Money is made available the rates offered to them;
monthly by direct debt to to the borrowers from money is taken from each
their account ZOPA’s account lender in rank order until
the full amount is
matched
 Funding
• Initially received funding from two private equity groups:
• Munich-based Wellington Partners
• Benchmark Capital of the US

• Zopa backed by the firms who also invested in some companies such as :
 SWOT Analysis
Strength:
• Offer loans at a lower rate than the banks to the
borrowers and to offer a higher rate to the
lenders
by eliminating the middleman
• No interest and credit risk
• Minimal brick and mortar presence required
• Backup from venture capitalists
Opportunity:
• The growing craze of social media and high level of
involvement of people in social connectivity sites
• Many sub-prime borrowers with low credit rating
whom the banks are reluctant to offer credit
• Large untapped market of investors planning to invest
in a different asset class.
• Sharing of common platform between P2P lending
sites to offer credit across the lending networks
Weakness:
• Cannot cater to large corporates due to the loan size
• Collection is a problem in case of default as no
collateral is taken from borrowers
• Commission and annual maintenance charges are
the only sources of income
• Lacks the marketing muscle of large banks
• Lack of regulatory mechanism
Threats:
• Social media may get out of trend and people
may turn away from P2P lending
• High counterparty risk for lenders as compared to
bank deposits
• Acquisition threat from traditional banks due to
their size advantages
Competitors
Prosper
Prosper Marketplace is an
online lending platform that
connects people who want to
borrow money with
individuals and institutions
that want to invest in
consumer credit.
Lending
RateSetter Bondora Lendable Works
Personal Loans with Great
Lending Works is a
Rates. In Minutes. Lower peer-to-peer (P2P)
RateSetter is a peer-to- Bondora is the meeting rates; your loan comes lender that matches
peer lending exchange. place that unites directly from investors. underwritten personal
investors and borrowers Instant money; we built loan borrowers with
from all corners of the our platform for speed. shrewd lenders.
world.

Founding 2005 2010 2008 2014 2012

Date
Type Private Private Private Private Private
Tags Financial Services Financial Services Financial Services Financial Services Financial Services
alternative lending fintech alternative lending fintech fintech
brokerage p2p fintech p2p p2p
data management payments payments
fintech

Location San Francisco, US (HQ)

Phoenix, US
London, GB (HQ)
Leicester, GB
Tallinn, EE (HQ) Greater London, GB
(HQ)
London, GB (HQ)
Hoddesdon, GB
San Francisco, US

Employees 390 191 57 77 43

Alexa Website 36400 370557 84817 344689 363627

Rank
Zopa’s Loan Records
 Statistics of Zopa
300 members at 26000 members after 4 Safeguard fund total
launch months of launch £7,256,977

historical bad debt loans

0.25% since 2010 between £1,000 and £25,000

Highest amount lent by one

individual
Number of lenders- 58K £1.3m
Number of borrowers-107K
Average age of lenders- 48
Average age of borrowers- 42

average loans
between £2,000 and £5,000
 Target Customers
The main target customers are the ones who find it difficult getting credit
because they do not have a traditional 9 to 5 job. They were termed as
Freeformers by the First CEO of Zopa Richard Duvall.
They didn’t want to work as “salary slaves” for big companies until
retirement; they didn’t want to defer enjoyment until retirement. They
wanted to spend their time doing things they loved—start their own
businesses, travel, and do other work that they love.
According to Duvall this market is growing and all these new Freeformrs
are customers of Zopa, and they can help these people get a credit form
independent lender.
Marketing Promotions
 Word of Mouth
 Public and Customer Relations
 Media Partners:
• Magazines
• Newspapers
• Online Finance Websites
 Social Media:
• Blogs
• Twitter
• Facebook
 Search Engine Optimization
 Affiliate Marketing
 Risk Management
How Zopa reduces the lender’s risk:
 Customer Identity verification, credit score check and risk assessment of
every borrower by a dedicated team. Only after extensive verification of
the customer credentials the customer can borrow money.
 Distribution of funds across several borrowers. This ensures that if one
borrower is incapable of repayment the lender is less likely to lose the
entire capital.
 The lender’s money is held in a separate account in the Royal Bank of
Scotland. This ensures security and safety of the lender’s money.
 The collection agency is responsible to chase any defaulter on behalf of
the lender.
 Safeguard funds is put into place to cover the loan amount in case of bad
debt.
 Revenue Model of Zopa
Zopa

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Interest on Loan Amount

Lenders Borrowers
Capital (Loan Amount)
 Is Investing in Zopa a good decision?
• Zopa has revolutionised the way the traditional financial system works. it brings independent
lenders and borrowers from different areas together to form a common agreement. It eliminates the
need for customers to work with traditional financial institutions in assessing credit and eliminates
the requirement for many of the face-to-face interactions and manual processes that have
traditionally been a part of boring experience .
• Zopa has a low-cost structure and a reliable financing structure to bring about a common ground
between the lenders on the borrowers .
• It has a deep customer understanding, strong financial networks, software development system and
an innovative business model which can be termed as one of a kind and this helps in overall
scalability of the business in the future.
• This simpler business model of moneylending and borrowing will attract more customers and thus
increase the customer base which in turn helps in overall revenue generation. The fact that there
are increasing number of Freeformers who can be termed as the early adopters of this form of
financial service is big leap towards the strong foundation of the business.
• Zopa has a steady and strong customer base which based on the current statistics is expected to
grow more. The fact that Zopa brings a unique mode of financial service to the table will attract
more customers and it targets a completely new segment of customers makes the business more
scalable.
• The investments made in Zopa will eventually give a good ROI based of these facts.