How would you like an average return of 9.1 per cent on your savings in the knowledge that your money is directly helping someone to pay for their wedding or university fees - and all without having to deal with incompetent call-centre workers?

This is what is on offer from Zopa.com, so it is little wonder that the number of people shunning conventional savings accounts for the peer-to-peer lending website has risen eightfold since the beginning of last year, with more than 2,500 new members joining last month alone.

The site is proving so popular that its founders met Treasury officials this week to discuss how to use their model to help to solve some of the credit problems of the financial crisis.

For those unfamiliar with the concept, people with money to invest are put in touch with borrowers who need a personal loan. By cutting out the middleman Zopa can offer competitive rates to both parties.

Borrowers are vetted thoroughly and their credit histories are checked before they can request a loan. Those who meet the criteria are put into five categories - A*, A, B, C and Y - based on the perceived risk of them defaulting.

As a lender, the interest rate that you obtain on your cash varies depending on the category of borrower you lend to - A* being the lowest risk, offering the lowest returns, and Y offering the highest returns - and whether you lend for three or five years. The longer you are prepared to lock away your money, the higher the return, ranging from an average of 7 per cent for the lowest-risk three-year loan to as much as 12 per cent for high-risk five-year loans.

So does Zopa really offer a win-win solution for savers disillusioned with poor returns? There is no doubt that the returns are better than anything in the best-buy tables at the moment, where the most attractive fixed-rate account is offering only 4 per cent. But you have to balance that with the risk of lending to strangers.

Giles Andrews, Zopa's co-founder and managing director, insists that the risk is lower than you might think. He says: “We treat lenders' money as if it was our own and turn away the majority of those who apply for loans. We also ensure that risk is diversified by splitting investments of £500 or more between a portfolio of 50 borrowers.”

This keeps down the level of bad debt to 0.3 per cent, Mr Andrews estimates - much lower than the default rate of the average high street bank. A borrower defaults if he or she falls behind on a minimum of four monthly repayments. As a last resort, Zopa will call in a collection agency to buy up the debt and the agency will give the lender a proportion of what he or she is owed.

Zopa lenders must also be aware that they sacrifice statutory protection because the service is not covered by the Financial Services Authority. If all borrowers defaulted and you lost your savings, you would not be entitled to claim any money from the Financial Services Compensation Scheme.

Kevin Mountford, of moneysupermarket.com, the comparison website, urges savers to make sure that they understand the dangers before signing up. He says: “Zopa has been around for a while, which suggests that the model works. The basics are fine, and your money is split between a range of people so the risk is minimised, but it is still there. Lenders must go into it with their eyes open and not chase rates for the sake of it. Having said that, the risk is no different from that when investing in equity markets.”

Zopa's surge in popularity is not only because of the rates it offers. For many people it is a way of avoiding dealing with banks and doing something ethical with their money. Mr Andrews agrees: “There is a growing demographic of people who feel that a social return on their money is important, and some who lend through Zopa do so for philanthropic reasons.

“Our growth is also driven by rising anti-bank sentiment. Borrowers do not mind paying interest as much when they know that it is going to go to a real person, not a greedy bank. And they feel that it is more important to pay it back on time when there is a real person at the end of the transaction.”

Brian Radley, a civil servant from Croydon, South London, decided to try out Zopa in September. He lent £1,000 and now describes himself as “a Zopaholic”. He receives an average return of 10.5 per cent each month, but says: “I contribute regularly to the message boards on the website and get a kick out of interacting with people who I have lent my money to. Borrowers often thank lenders, telling us that they have had a great holiday with the money. One woman used the loan to buy her disabled son a wheelchair. That makes you feel good.”