SAS Mission-Critical for Zopa, Enabling First for Social Lending

Accurate and efficient credit scoring from SAS ensures minimum risk for Zopa's customers

22 February 2007 -  SAS, the market leader in the new generation of business intelligence software and services, has been selected and implemented by Zopa to successfully create the UK's first marketplace for social lending. Zopa is an online marketplace where people can lend and borrow money directly to and from one another at a good rate of return and at low risk.

SAS has played a major role in Zopa’s uniquely low bad-debt rate and, in consequence, the excellent returns it delivers to lenders. By using SAS, Zopa has achieved an incredibly low bad debt rate of <0.05% of money lent in comparison to the market average of 3.45%, making it a much more secure option for personal lenders. Using SAS’ credit scoring software, Zopa is able to accurately credit score all its borrowers, minimising risk to its business and its customer base.

From the outset, Zopa needed to be able to accurately credit score all borrowers, with the aim of minimising bad debt on their unsecured loans. Accurate credit scoring and a low bad debt rate would lift lender confidence, encouraging them to go through Zopa over traditional banking routes. Zopa also required analytical applications which could efficiently qualify and match lenders to suitable borrowers.

To meet Zopa’s requirements, any credit scoring solution had to be fast, robust and scalable. Zopa chose SAS’ credit scoring software, which includes credit checking and authentication, because it met all the aforementioned criteria and stood out as the clear leader in the field. Using SAS, Zopa is now able to accurately score each individual borrower and then place them into one of four credit categories, each with a SAS created profile attached. SAS’ software then enables Zopa to match lenders to borrowers based on a correlating risk/ROI profile.

Karen Wilshere, Risk Director at Zopa says: "Accurate credit scoring was absolutely business critical to the entire project. We needed to demonstrate to the financial media and to potential lenders, that we are extremely careful with lenders’ money, keeping bad debt close to zero. We also need to be fully transparent to the regulators and reporting from SAS provides the information for the tight controls that Zopa requires to comply with regulations and look after lenders’ money".

Tim Parlett, Zopa’s Chief Technology Officer adds: "SAS software is mission-critical because we use it to score every single applicant. It does exactly what you want it to do and we know it is the leader in this field, that’s why it was the obvious choice."

Following the success Zopa has achieved through using SAS’ software, coupled with SAS’ flexibility and scalability, it now plans to use SAS to expand the business rapidly both in the UK and overseas markets in the near future.

About Zopa

Zopa is the online marketplace where people meet to lend and borrow money. Lenders get great returns and borrowers get low-cost loans. With no bank in the middle, both parties get better rates.

Zopa makes money human again - lenders can see where their money's going and borrowers, where their money's come from.

Lenders are enjoying a smart way of getting a return, alongside their savings and investments. Some lenders are earning up to 14% pa, and the average return on all money lent to date is 6.75% pa (figures are before tax, but after bad debt and fee).

Borrowers are finding it a fair and human way of getting a low-cost loan. They are enjoying market-leading rates, with a typical APR of just 4.9% (based on £3,000 over 3 years in the A* market), and the flexibility to repay their loan early at no extra cost.

To protect lenders' money, Zopa uses all the safety measures bank use, plus a few more. All borrowers are identity-checked, credit scored and risk-assessed, and anybody lending £500 or more has their money spread across at least 50 borrowers.

Zopa was set up by many of the team that launched Egg, and is backed by the same investors that backed eBay, Betfair and Skype. Since launching in the UK in March 2005, over 120,000 people have joined.

Zopa was voted "Internet innovation of the Year" at the CNet Technology Awards in October 2006, and in the same month was named by Business 2.0 as 1 of 11 disruptive companies "whose breakthroughs will change everything." In August 2006 Zopa was given 5 stars from What Investment Magazine, the first time they've given a perfect score in years.

Zopa Ltd is authorised and regulated by the Financial Services Authority as a general insurance intermediary, holds Consumer Credit Licences from the Office of Fair Trading, uses the same processes and fraud prevention systems as banks (including Equifax, Experian and Call Credit for credit rating), and is a member of the Finance and Leasing Association.

Zopa stands for Zone of Possible Agreement. It is the overlap between one person’s bottom line (the lowest they are prepared to get for something) and another person’s top line (the most they are prepared to give for something).

Zopa can be found at www.zopa.com

About SAS

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