I encourage all reporters to check facts. In the p2p lending space, both major US p2p lending companies provide data and this data can usually corroborate or debunk basic marketplace claims.
I was reading a recent Pittsburgh Post-Gazette article on p2p lending: The credit crunch: How did it happen and where do we go from here? (Thanks to Prosper Lending Review for pointing me to the article: Credit Crunch Solutions). It was interesting, but one thing made me stop and think…
Renaud Laplanche, CEO of Lending Club based in Sunnyvale, Calif., said lenders in the online community are regular people who don’t operate under the same restrictions banks do and are not affected by the credit crunch.
He said loan volume has been increasing 100 percent each month since the company opened in May. This month, about $4 million in loans were made through the Web site. The three-year unsecured loans are $5,000 to $7,000 at interest rates of between 10 percent and 12 percent.
I found the 100% month over month growth astounding, but believable. This is the part of this that I found hard to reconcile, “$4 million in loans were made this month.”
My 1st thought was wow, going national really made a difference. Then I realized that they were giving me the data and that I could check the accuracy of the claim.
(Even though I am about to debunk the 4 million this month number I still think going national is a huge success for Lending Club.)
The first indication that the 4 million number might be wrong is found directly on a Lending Club Page: Latest Performance Statistics. As of this publication (12/26/07) it states a total loan volume to date of $4,451,675. That would make “about 4 million” a stretch of either the ongoing growth rate or the monthly loan volume.
So next I decided to see if the numbers in data that Lending Club provides could shed some light… So I downloaded the latest loan statistics file into ProProsper and ran the following sql statement (gets the total count and amount of issued loans from 11/1/2007 until the end of the LC export file). This is just over 1.5 months of loans.
select count(*),sum(cast([amount borrowed] as money)) from lendingclubloanstats where cast([issued date] as datetime)>=’11/01/2007′ and status=’current’
The result… 253 loans for $2,483,300.
The conclusion… The newspaper misquoted the Lending Club CEO. He must have meant that as of this month they have originated about 4 million in loans, NOT in the last month.
Anyone, can run my sql at ProProsper or any other sql related to the LendingClub Loan statistics (table name = lendingclubloanstats).
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