Zopa – the bank that likes to say 'Hello There!'

Zopa offers some advantages, such as greater flexibility – if you wanted to pay that Giraffe Loan off early, you'd still have to pay all the interest you'd pay if you were sticking to the normal schedule. With Zopa, you pay it off as soon as you can and pay no more interest. It will also lend to some people who the banks would penalise, or turn away.

For all Zopa's open-minded approach to lending, it's backed up with some serious credit assessment work to make sure that lenders are a worthy risk, with a heavyweight lending team led by former Abbey and Alliance and Leicester credit expert Karen Why.

If anything, they're more thorough than banks and building societies, drawing on data from three credit reference agencies, as well as data about what other assets you have, and listening to customers' own views about why they should be lent money.

"We go to extraordinary lengths to find out about you and we are very interested in your ability to pay but we don't have a fixed view about what is a good or bad risk," says Duvall.

Zopa attracted a certain amount of critical coverage when it launched. Citizen's Advice told The Observer that "It is unclear how lenders and borrowers would be better off than if they were to use a bank. Higher interest rates usually go hand-in-hand with high-risk lending and we would urge people to think twice before investing their savings into this."

Don't be evil

Looking at the deals available on Zopa, they're right – they're competitive but not exceptional, and it doesn't seem to be as risky as they thought. But for Duvall, comparing it to a bank is missing the point - It's for people who just don't like banks at all.

"80 per cent feel that they are paying back to real people, not a bank, not contributing to their excess profits," says Duvall.

"Our lenders like lending to other people because they can see where it is going. That is a major part."

The whole business is soaked in Googlesque post-corporate groovyness, from the ultra-friendly emails to users which start "Hello there, Ben", to the CFO who spends one day a week working at a charity.

Its target market is people who dislike oppressive, greedy banks, and people who banks dislike for their freeform, suit-dodging, self-employed ways.

Duvall says that he and his colleagues are not necessarily looking to be bigger than eBay by tomorrow. "Obviously we have business plans, but we are not targeted on size," he says.

His backers may feel differently. One of the first to put money into Zopa is Benchmark Capital, the VC firm that backed Betfair and eBay. They will be looking to make something pretty big out of it.

Duvall says he has had over 50 offers to take Zopa to other countries, of which the US is likely to be the first.

It's also received a positive response from the punters. Five months from launch, Zopa has 25,000 registered users, offering over £3m in loans.

Zopa doesn't seem likely to eat HSBC's lunch just yet. It might just nibble the corner off its amuse-bouche, though, and that would still make for some very tasty business.®

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