INTERNET social lending is becoming an increasingly popular way of lending and borrowing money as an alternative to banks.
Statistics are showing more investors and borrowers are turning to the internet in the wake of the banking crisis as they move away from traditional loan methods.
Zopa UK acts as a market-place platform and credit-checking service, allowing invest
ors to lend to people wanting personal loans via its website.
The three-year-old business has so far lent out over £28 million and financial analysts have predicted that social lending could represent 10 per cent of all personal loans by 2010.
Adam Schofield, 26, of Halifax, found out about the scheme through the national press and decided to become a lender after researching more about it.
He said: "It's another way to invest your money. I have got savings and share options so this is another income stream. A lot of people are seeing it as a good investment vehicle.
"It's quite a novel idea - a good way to cut out the middle man.
"People lending get a good return and for people who couldn't get a loan from the bank or are in financial difficulties, it's a positive thing."
Adam said there was still not enough awareness of the scheme, which at the moment had more investors than borrowers using the service.
His money is spread evenly as small amounts across the markets.
He said: "You can either choose that, and specify how much you want to lend and not have a choice in who you lend to, or people can make a profile and say why they want the money and you can choose to lend to that specific person."
Giles Andrews, managing director of Zopa, said: 'It's a much more personal way of managing your money.
"We take our credit checking responsibilities very seriously and only lend to those who can genuinely afford the repayments."
The full article contains 324 words and appears in Evening Courier newspaper.
