By COLIN TAPPING

Published at 09:47, Friday, 25 September 2009

OVER 400 people in Tynedale have signed up to a social website to lend and borrow money to each other, bypassing the banks.

Zopa.com, the world’s first peer to peer internet lending site, reported this week that 428 people in Tynedale have become members. Lenders decide the rate they would like to earn, and Zopa matches them with creditworthy borrowers.

Lenders are currently enjoying an average return of 8.1 per cent after fees, while borrowers have told the site that the rates are anything from 30-50 per cent cheaper than they have been offered by the banks.

Zopa, which stands for ‘Zone of Possible Agreement’, takes a one per cent fee from lenders and charges borrowers a flat fee of £118.50.

Zopa chief executive Giles Andrews said: “People in Tynedale who are Zopa members are part of a total of more than 300,000 across the country who are taking control of their own finances.

“They are realising that even if they can convince their bank to lend them money, it will only do so at an extremely high rate, and that a bank will keep a lot of their money in charges.

“Similarly, banks are treating savers with contempt, offering paltry returns on their investments. Zopa is a realistic alternative. Zopa lenders have collectively loaned more than £50 million to credit worthy borrowers since 2005.”

Published by http://www.hexhamcourant.co.uk