Zopa: The Power of Peer-to-Peer Lending

Case Solution

Mikolaj Jan Piskorski, Isabel Fernandez-Mateo, David Chen
Harvard Business School ()

Zopa, a UK-based peer lending company, connected individual lenders and borrowers through an online interface. The company charged a small fee for completed loan transactions, but made no profit. Zopa offered two platforms, Markets and Listings. Markets was an automated system that collected loans by combining the lowest loan offers from various Zopa lenders. Zopa Listings allowed potential borrowers to post eBay-like listings explaining who they were, how much money they needed, and how they would use it. The lenders then made offers indicating how much and at what price they were willing to lend. Neither platform was very successful. In February 2009, the CEO of Zopa is considering withdrawing from the lists and focusing on the markets, despite the fact that an American company, Prosper, has attracted many users with a product similar to Zopa Listings.

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