Quakle, an online peer-to-peer lending community, has launched today allowing users to lend each other money without using banks.

The new lender credit checks borrowers and also undertakes a reputation score based on individual behaviour, encouraging users to be more financially responsible.

Josselin Digny, director at Quakle, said described the service as 'peer-to-peer lending for community-minded people'.

She said, 'Not only do we encourage people to get to know each other on the site, but they can join forces to form groups.'

Digny added, 'People’s reputation scores are affected by the financial behaviour of their peers and vice versa. This peer group community encourages people who are good with money to stick together and support each other.'

Those willing to lend money will not be charged and will be given £30 for registering as a lender. Borrowers will make loan requests open for ten days, during which time potential lenders will bid to fund a proportion of loans, setting their own interest rates. The 'auction' system will match lenders with borrowers who then enter into a legally binding contract.

Quakle.co.uk users will also be encouraged to get to know ach other and will incorporate other methods of making loan requests such as through Facebook or blogs.

'The amount of money invested and borrowed would typically be lower than through some peer-to-peer sites and the terms of the agreement shorter and therefore more flexible,'  said Digny. 'If you are an investor who is fed up of getting poor returns, then it might be worth checking out Quakle.'

The lender is registered with the Office of Fair Trading and HM Revenue & Customs, and is the only peer-to-peer lending site regulated by the Financial Services Authority as a small payments institution.

All members are ID checked to verify they are who they say they are and all borrowers are credit checked with the Experian database. Quakle checks for CCJs and for any history of insolvency.