Wonga and the likes of

[dewaltman]

Have I read somewhere that joe public can lend the money to these companies to lend out the other end?

It might not be Wonga, but was there another?

Whats the risks? I guess there must be some protection to actually getting your money back?

[strudel]

Zuma?

[bompey]

zopa
http://uk.zopa.com/ZopaWeb/

[strudel]

bompey said:

zopa
http://uk.zopa.com/ZopaWeb/

That's the one I was thinking of!

[ZondaMark]

It just looks like a bank where you (the depositor/lender) bear all the default risk of the loans, rather than the intermediary.

[strudel]

From what I remember, your money is split across several loans, so you might only be exposed by a fiver on each.

[NobleGuy]

Over the last 12 months Zopa lenders have made an annual return of 8.3%, before bad debt

[Merlot]

I invest on Zopa.

The returns are pretty good* provided you know what you're doing or are prepared to lose the money if you're investing in the more riskier market sectors. If you set your target interest levels correctly and only sell/loan to A*/A markets you'll be pretty safe, plus as mentioned your sum is spread out on various loans in £10 segments.

If you want to know more, ask away. I'm not in it for the money, I just love the concept of social lending and the fact that it's more hands on than just dumping the money in a savings account.

• They work out about the same as the top paying savings accounts (although at the moment, about double that due to poor savings rates), once you consider an element of risk (I factor a 10% default rate pa but so far have had zero defaults).

Edited by Merlot on Friday 6th August 21:39