By: Katie Jenkins
Having witnessed the collapse of many financial giants in recent years,
most of us are far more familiar with the cut-throat world of corporate
finance than we really wanted to be. In this ruthless, high-risk
environment it's easy to forget that money-making and money-saving can
still have a social conscience and a sense of community spirit. Here
are 8 innovative finance websites that will help you save money, make
better financial choices and even start chatting to your neighbours.
Loans and Investments
Zopa is a lending and borrowing exchange where members of the public lend money to each other. You can set up as a lender and set your own rate of interest, the time period over which you want to lend the money and also the level of risk that you are comfortable with. For example, a 'riskier' borrower would be someone younger or with a less solid credit history. Your money is split among a number of borrowers to mitigate the risk, and if a borrower misses a payment, Zopa will follow up with them on your behalf.
If you want to borrow money through Zopa, you must first be identity-checked, credit-checked and risk-assessed. Once accepted, you are placed into one of 5 'markets' (based on your credit-worthiness), and will then be able to get quotes for the amount you wish to borrow. You can borrow any amount from 1,000 GBP to 15,000 GBP and can choose a loan term from 12-60 months. Unlike borrowing through a traditional lender, you are not charged a fee for repaying a loan early. It is worth getting a copy of your credit report before you apply, so that you can correct any problems and maximise your chance of being accepted.
Lend with Care is a pioneering lending service set up by aid charity CARE International, which helps people to directly support entrepreneurs in the developing world. The entrepreneurs provide an overview of their business and detail the reasons why they need a loan, the amount that they need to borrow and their proposed repayment schedule. Businesses currently featured on the site include hairdressers, market stalls and tailoring services, and you can choose which person's business you would like to support.
You can choose to lend anything from 15 GBP to the full amount requested, and the recipient receives 100% of the loan that they requested; no administrative charges are deducted from the entrepreneur's loan. As the entrepreneurs repay the (interest-free) loan in full through a series of installments, you are able to then reuse your investment capital to help further entrepreneurs get their businesses started up in the future. Lenders must set up a profile on the website but you can choose whether to provide personal details or to remain anonymous. So you get the opportunity to have a positive impact on someone's life and get your money back afterwards - the perfect recession-proof good deed!
If you want to ensure that your financial decisions complement your social or environmental concerns, Your Ethical Money is a useful website to point you in the right direction. Not only does the site (a not-for-profit initiative run by EIRIS) dispel the myth that an ethical investment means compromising on your financial returns, it also helps you identify the companies that suit your principles. The site is separated out into different financial product areas, including Insurance, Mortgage, Investments and ISAs, Credit Cards and Student Finance.
If you are looking for an investment product, you can see a list of funds and the areas in which they invest. This means that you can easily find a fund that, say, avoids investment in arms companies or actively chooses to invest in companies that support environmental issues. If you're looking for a mortgage or a personal loan, find out whether your lender of choice practices responsible lending, and whether they also lend to corporations whose activities you don't approve of. If you are choosing a pension, you may wish to ensure that your pension fund only supports socially responsible companies - especially since your financial involvement makes you a shareholder in those companies. Whatever your cause, make sure that you're putting your money where your mouth is.
The recession has made everyone think a little more carefully about how to get the best possible value for money, and as a result, money-saving vouchers have exploded in popularity in recent years. However, a new breed of voucher sites has introduced a community element, relying on group-buying power to offer one daily 'super-deal' rather than hundreds of smaller deals. Groupon UK and Living Social are two such examples.
The first of these, Groupon, offers a daily, heavily discounted product or service to members in every UK city. Every deal is specific to the city you live in, and could be for anything from 80% off the price of a three-course meal in a nice restaurant to 60% off a haircut or spa treatment. The deal is only valid for that day, and if not enough people sign up to buy the deal it is cancelled and you pay absolutely nothing. Living Social offers much the same service but 90% of the deals do not rely on a minimum number of people buying them, so they're pretty much guaranteed. Both of these sites reward you financially for recommending deals to your friends and family, so if you're passing on the deals to other people, make sure that they purchase them up via a link that you generate in your account.
Do you have something that you're prepared to lend, give away or help out with? Streetbank is a community project that connects you with other people who live nearby. Recent additions to the site include the offer of composing and songwriting lessons, the loan of garden equipment and a four-man tent and someone offering travel advice for people heading out to Hong Kong. Of course, it is all much more helpful if this comes from someone who lives in your local area, so when you sign up you are asked for your postcode, as well as something that you can provide to fellow community members. Freecycle operates along similar community-focused lines, except that it is a free marketplace for items that people no longer need. If you're moving house and don't have room to take that chest of drawers or sofa, offer it for free on Freecycle and someone will come and pick it up from you.
You sign up to a group in your local area and can then see all 'Offered' and 'Wanted' notifications for that group. You can limit the notifications to a daily/weekly digest or see them as and when they come through. Absolutely everything has been offered on the groups, so it's likely that if you want something, someone else will have one lying around in their house gathering dust! Another such site is The Freeconomy Community, where you can share tools, skills or even offer unused space to charities or groups for weekly meetings. The aim of all of these community sites is to get local people talking, helping each other out and saving money. And if they make the world a slightly friendlier place at the same time, that is certainly no bad thing.