Another week and another great member’s email from Zopa. The social banking network reported today that more than £1million was lent via the network last week.

It’s the fifth occasion that lending has reached such volumes according to Zopa and is a sure sign that consumers are turning to social banking as a very real alternative to both rip-off charges and poor returns from high street retail banks.

Zopa matches lenders with borrowers packaging loans in £10 chunks to mitigate the risk to lenders. Borrowers are credit rated and matched with lending markets made-up of offers by lenders. It’s an efficient model that undercuts retail markets. Zopa takes a small cut for managing the debt and passes on the balance to the lender.

Its how a bank should work isn’t it? I think so.

I’ve been lending via the network for 2.5-years. In that time the average return (after fees) has been 9.35 per cent and I’ve had two instances of bad debt. Each week the cash collected is reinvested in the market.

National Savings & Investments (NS&I) announced today that it has withdrawn a number of deposit accounts because they’ve become too popular. Investors looking to generate returns that out perform any high street bank would do well to check out Zopa.