New interest-free lender launches Isle of Man pilot
A new interest-free peer-to-peer lending platform has launched on the Isle of Man.
ZeroPA, which operates online as Argid.im, was approved by the Office of Fair Trading on 8 September and launched on 1 November.
It intends to pilot its model on the Isle of Man before seeking approval from the Financial Conduct Authority (FCA) to expand across the UK.
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The lender will provide 0 per cent APR loans of £50 to £1000 over 52 weeks. It also has a small pot of money offering those in greatest need £50 grants.
For a loan, borrowers must apply online, and decisions are made within five days. Payments are then made direct to the retailer or utility company for food, utilities, clothing, and white goods up to £300 and electronics up to £100.
Applicants for both loans and grants must be over 18, permanently resident on the Isle of Man, provide details of income and expenditure and have a referral from a Citizens Advice Bureau, Credit Union, food bank, school, place of worship or other community group.
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Rather than generating returns from interest, ZeroPA generates fee income off its partnerships with retailers, repairers, manufacturers, and banks.
Chief executive and founder Saqhib Ali said ZeroPA appeals to altruistic investors, who wish to make a difference in society. Returns are not guaranteed, but Ali expects to be able to pay dividends to investors over time.
“In year five, we anticipate that we would be able to do a profit share, a bit like a mutual,” he told Peer2Peer Finance News. “We’d give dividends to our investors, we would have a risk pool that would help mitigate any losses, but we would actually have like a mutual profit share, like a Co-op or a Nationwide have done in the past.”
Ali, who has a background in banking and accountancy, likened the platform to “Zopa, plus Klarna or Zilch, plus TopCashback”, and said the vision is to offer the most vulnerable tailored support out of financial trouble, including education, saving and budgeting tools.
He began the business in 2016, seeking backing through various incubators, before launching as a community interest company in 2021 and approaching regulators for approval.
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