The Internet as simple as it is, is a killer for brick and mortar institution. I’ll rephrase: many business now are cutting down on building and retail branches because most of the job can be done online. Another way to see it is why start a company in Kuwait city where the square meter is really high priced compared to sab7an or thajeej area, your customers are online and do not need to see how prestigious or close you are to them. The question i’m asking here, are we one day going to drop physical retail branches and go online to request for a loan? even finance companies are in the loop too, ie:why go to AL Manar financing company in Kuwait city, find a parking, wait in line, asked to get another document, then back again, fearing the electricity will get cut when in the elevator:P etc etc… cant this all be done on the net. Kuwaiti business are all based on the law supporting such transaction, meaning you have to sign on certain documents manually, and you have to be identified by the employee of the financing company to get financed. So till the day comes that emails in Kuwait are accepted as legitimate papers we wont reach any new level. Back to the banks and financing companies, they exist because we as consumers deposit our salaries/saving (if any:P) and large corporation start up using loans from the same banks comprised from consumers salaries and saving. So banks act as middle men between corporations and consumers, and the middle man takes his cut(bank). So when the Internet comes in and as i said is has a tendency to break down physical barrier into virtual worlds we can visit any time of day. So here comes a website called Zopa.com, it used the Internet into its advantage and took the place of the middle man in our case the bank. Lets say i have extra money would love to lend instead its hanging around the Dana account, and some other guy in Kuwait needs a loan but thinks the interest that banks are charging is high. He can visit Zopa.com request the amount needed, i take up his request as a register lender at Zopa and agree to lend him the loan with a lower interest rate than physical banks and voila, the banks just lost there initiative to become the only middle men. offcourse alot of work is needed to build such a website and ensure that money is returned and not defaulted, but the website itself here is not the care taker of the money exchanging hands, and is only the process or channel to do so in a legal rightful manner. Zopa became the new virtual market, place for lenders and savors. To me its sounds like Zopa is a small termite infestation working slowly at the foundation of banks all over the world:P For such an experience to work in Kuwait is impossible due to our slow, close minded legal system that would never coup with our resoanbly fast business world. Visit Zopa.com for more info.
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