Jalebi, a firm that helps clients to create a dialogue with Indian Britons, and Zopa, a person-to-person loans company, have formed a pilot group of 100 online lenders who will channel the interest they earn into designated charitable ventures.
Prospective lenders join up with Zopa by stating how much they want to lend, how long they want to lend for and what rate of return they would demand. The company then matches the lender with a suitable borrower.
Jalebi investors put money into the Zopa market in the same way but, when repayments are made, the interest is taken off and put towards the relevant project. Because there is no bank involved, there are no additional administration costs and all transactions are managed by Zopa technology.
Dil Patel, founder of Jalebi, said of the new initiative. "We are a group of guys in the community who are continually asked to fund projects, and we decided to get smarter about it.
"We decide what projects to fund as a collective. We have a vote and measure the suggestions against our criteria to make sure we are funding a credible charity. After that, the donations can begin."
The pilot scheme, which began last week, has so far pledged to fund a minibus for pensioners in West Bromwich and football strips for 20 youth football teams in Leicestershire.
Both these projects are primarily for the benefit of UK Indians. Patel said there were more than 280 other Indian communities across the country that could form similar lending groups. But he said the Jalebi scheme was open to anybody who wanted to join.
James Alexander, co-founder of Zopa, said the initiative was "a very natural way to make money. It has worked incredibly well. Effectively, Jalebi has found a new way of accessing funds."
- Jalebi is a marketing organisation that works on behalf of the UK's Indian population
- Zopa is a person-to-person online lending marketplace
- Jalebi's pilot group of lenders will donate the interest they earn to community projects
The group has voted to fund a minibus for pensioners in West Bromwich.