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London: Social money-lending exchange Zopa.com has launched a new facility, aimed at the MySpace generation, allowing lenders to choose which individuals they want to help.
The new, more interactive service, 'Zopa listings', gives lenders the ability to peruse borrowers' individual pitches.
Until now, anyone wanting to borrow money via the site - often called the eBay of lending - is lumped in with 50 or more hopefuls with similar credit histories.
Under the new feature, borrowers create a personal profile to pitch online for the loan they want, giving details of how much they want to borrow, for what reason, their target interest rate and individual circumstances.
Like a social networking profile, they are able to post photographs and, shortly, video clips.
Lenders then bid on the listing, in a similar way to an online auction, saying how much they are prepared to lend and at what rate until the listing closes.
Competitive bids
They compete against each other - coming in with more competitive bids until the auction ends, even if the loan amount is already fully covered.
If bids for the entire loan amount are received, the loan is made at the aggregate interest rate of the best bids. If not, the borrower can relist the item.
Giles Andrews, managing director of Zopa UK, says the development is likely to appeal to the MySpace and eBay generation -people whose "reaction when they want something is to stick up lots of information and see what happens.
"To them, giving lots of personal information is the most natural thing in the world," says Andrews.
Charges for the new service are the same as the existing facility: Lenders pay an annual management fee of 0.5 per cent on the money they lend, and borrowers pay the same on their borrowings.
For Andrews, it introduces an openness, transparency and market effectiveness that has "never before applied when people seek to borrow money".
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