A Web site that allows people to borrow money from each other without going through a bank has been launched by the executive team that founded Internet bank Egg.
The service, called Zopa (Zone of Possible Agreement), will enable people to borrow money from other individuals, rather than financial institutions. It has been set up by a company that includes several members of the original Egg management team, including Richard Duvall, who was launch director and then chief marketing officer at the online bank and James Alexander, Egg's former strategy director.
Zopa charges borrowers a fee equivalent to one per cent of any loan made but doesn't charge lenders anything to use the service. Rates of interest are based on the borrowers personal Equifax credit rating.
The venture is backed by Wellington Partners as well as Benchmark Capital which previously gave financial backing to Ebay.
Duvall, who is Zopa's chief executive, told reporters that the service was designed for individuals who would rather lend and borrow directly with people than deal with faceless corporations.