January 16th, 2008 — News
Another peer-to-peer lending article in a major publication. These are just a reprints of the Washington Post earlier in the week.
Chicago Daily Hearld: Peer-to-peer online lending must be considered carefully
The Denver Post: “Social” lending steps in as traditional route tightens
Related Articles Related StoresJanuary 16th, 2008 — Lending Club, News, Prosper.com, Zopa
The P2P lending buzz is everywhere…
Today it is in the Miami Herald: Anyone can be a banker with peer-to-peer lending
Related ArticlesWhen Walter Kond needed $25,000 to buy a shipment of home-theater seats for his Hialeah company to resell, he didn’t go to the bank. He went online. Kond posted a loan request on Prosper.com and a few days later, more than 300 absolute strangers had pooled together the cash for a three-year loan at 13 percent interest.
Welcome to the world of peer-to-peer lending — where anyone with Web access can be a banker and small business owners like Kond are finding a new way to raise cash.
January 15th, 2008 — Kiva, Lending Club, Loanio, MicroPlace, News, Prosper.com, Zopa
A couple of peer-to-peer (p2p) lending articles came out in major publications over the weekend… Enjoy…
The ChicagoTribue: Peer-to-peer lending helpful, but know rules
Sometimes you have to take matters into your own hands.
At least that’s the mind-set of individuals who lend and borrow money from each other online, known as peer-to-peer lending. In this virtual community you may stand a better chance of obtaining a loan for your start-up business or earning an attractive return.
But though based on self-rule, peer-to-peer lending is not without its conditions. Consider the following before you forgo the bank entirely. [...]
The Washington Post: You Can Lend P2P, but Can You Collect?
Related Articles Related StoresIn the wake of the subprime mortgage meltdown, traditional financial institutions have tightened up on who gets to borrow money. But some people are still finding ways to borrow what they need, thanks to another area of lending that is booming.
Person-to-person lending, or “social” lending, is growing at a phenomenal pace on the Internet as consumers look for an alternate way to pay off debt, according to new research by Javelin Strategy & Research. Javelin predicts that the demand for person-to-person lending services, or P2P, to pay off credit card debt may grow from $38 billion to $159 billion over the next five years. [...]
January 11th, 2008 — News, Prosper.com
Well the results are official… The Prosper Blog will take home the 2007 Performancing Reader’s Choice for Best use of a Corporate Blog.
The runner up was South West Airlines
The editor’s choice was Matt Cutts and the runner up editor’s choice was Dreamhost.
Here is a link to the voting results.
Related ArticlesNovember 19th, 2007 — News, Prosper.com
I received a marketing email today from Prosper regarding the 100MM in loan volume. Titled: You Couldn’t Have Done It Without You. How corney is that? Essentially thanking every lender for their part is reaching 100MM in loan volume.
Here is the rest of the letter…
Related Articles Related Stores
Prosper is pleased to announce that you have helped us reach $100MM in loans!
Your involvement as a lender in the Prosper community has enabled people to start businesses, eliminate debt, improve homes, and fund educations. Thank you for helping us create opportunity for fellow Americans through the Prosper marketplace.
Next stop, $200MM - bid on a loan listing now!
September 12th, 2007 — Features, News, Prosper.com
August 2007 Prosper People-to-People Lending Market Survey
Membership and Loan Volume Statistics
----------- ----------- ----------- ----------
2007 Year- Since
August 2007 August 2006 to-Date Inception
----------------------- ----------- ----------- ----------- ----------
New Members 30,623 12,825 270,866 408,633
----------------------- ----------- ----------- ----------- ----------
Funded Loans $6.6 $3.9 $56.6 $85.0
million million million million
----------------------- ----------- ----------- ----------- ----------
Average Loan Size $6,733 $5,080 $6,969 $6,037
----------------------- ----------- ----------- ----------- ----------
Daily Average Number of
Borrower Listings 2,575 1,173 2,202 1,366
----------------------- ----------- ----------- ----------- ----------
Estimated Annual Return on Prosper Select Index
-----------------------
August 2007
------------------------------- -----------------------
Prosper Select Index 10.31%
------------------------------- -----------------------
Prime Select Index 9.41%
------------------------------- -----------------------
Near Prime Select Index 10.73%
------------------------------- -----------------------
Sub Prime Select Index 14.95%
------------------------------- -----------------------
Average Borrower Rates on Prosper Select Loans
---------- -------- --------- ---------- ----------
August July August 2007 Year- Since
2007 2007 2006 to-Date Inception
------------------ ---------- -------- --------- ---------- ----------
Prime Select Loans 10.15% 10.29% 11.64% 10.03% 10.14%
------------------ ---------- -------- --------- ---------- ----------
Near Prime Select
Loans 16.83% 17.08% 16.25% 15.90% 16.06%
------------------ ---------- -------- --------- ---------- ----------
Sub Prime Select
Loans 25.88% 22.13% 28.72% 23.30% 23.89%
------------------ ---------- -------- --------- ---------- ----------
Mix of Funded Borrowers
------------ ------------ ---------------- ----------------
2007 Year-to-
August 2007 August 2006 Date Since Inception
---------- ------------ ------------ ---------------- ----------------
Prime 32% 26% 30% 28%
---------- ------------ ------------ ---------------- ----------------
Near Prime 59% 49% 57% 54%
---------- ------------ ------------ ---------------- ----------------
Sub Prime 9% 25% 14% 18%
---------- ------------ ------------ ---------------- ----------------
Noteworthy
Top Five Prosper Borrower States in August 2007
1) California
2) Georgia
3) Illinois
4) Ohio
5) Florida
Market Commentary by Chris Larsen, Co-Founder and Chief Executive Officer of Prosper
The market turmoil stemming from the ongoing credit crunch, subprime mortgage meltdown and housing value slump naturally begs questions about what impact this market environment is having on the Prosper marketplace. In a nutshell, we would categorize the impact as broadly constructive for Prosper lenders and prime and near prime borrowers.
As consumers are being hit with the evaporation of introductory credit card rate offers and home equity loan options, Prosper is becoming an even more attractive financing alternative, particularly for more creditworthy borrowers.
At the same time, lenders on Prosper are exhibiting rational behavior by steering their bids toward borrowers in the higher credit categories and being far more cautious about chasing higher rates offered by subprime borrowers. Evidence of this flight to safety is seen in Prosper’s mix of funded borrowers. For example, the subprime category accounted for only 9 percent of loans funded in August 2007, a marked decrease from August 2006 and the 2007 year-to-date average of 25 percent and 14 percent, respectively.
What remains to be seen is whether lenders on Prosper will start placing less weight on homeownership as a factor in their bidding strategies. It is possible that we may begin to see evidence of this trend given that in our most recent defaulted loan sale the debt buyer placed zero value on homeownership across all credit categories - a highly unusual shift away from placing value on what is typically considered Americans’ largest asset.
Definitions
2007 Year-to-Date: January 1, 2007 through August 31, 2007.
Since Inception: November 1, 2005 through August 31, 2007. Prosper’s by invitation only “friends and family” launch began on November 1, 2005 and Prosper launched to the general public on February 13, 2006.
Prosper Select Index: The Prosper Select Index return is the estimated average annual return on invested principal, based on actual delinquency performance to date. The Prosper Select Index includes AA - E credit grade loans for borrowers whose credit reports at the time of application indicated zero current delinquencies, three or fewer credit inquiries, and a debt-to-income ratio of 40 percent or less. The annual return period reflects loans originated in the twelve month period ending one month prior to the observation date of August 31, 2007. Prime Select includes AA and A credit grade loans (credit scores of 720+). Near Prime Select includes B, C, D credit grade loans (credit scores between 600 and 719). Sub Prime Select includes E credit grade loans (credit scores between 560 and 599).
Average Borrower Rates: Average Borrower Rates are the weighted average borrower rates on Prosper Select Index loans. Rates shown are interest rates, not annual percentage rates.
Mix of Funded Borrowers: Prime includes AA and A credit grade loans (credit scores of 720+). Near Prime includes B, C, D credit grade loans (credit scores between 600 and 719). Sub Prime includes E and HR credit grade loans (credit scores below 600).
About Prosper
Prosper (www.prosper.com), America’s largest people-to-people lending marketplace, was created to make consumer lending more financially and socially rewarding for everyone. Prosper’s membership consists of over 400,000 people from across the country. Since launching in February 2006, over $85 million in loans have been funded in the marketplace.
The way Prosper works is intuitive to people who have used eBay. Instead of listing and bidding on items, people list and bid on loans using Prosper’s online auction platform. People who register as Prosper lenders set the minimum interest rate they are willing to earn and bid in increments of $50 to $25,000 on loan listings they select. In addition to criteria commonly used by institutional lenders, such as credit scores and histories, Prosper lenders can consider borrowers’ personal stories and group affiliations. Groups on Prosper are instrumental in bringing people together for the common goal of borrowing at better rates. People who want to borrow on Prosper create loan listings for up to $25,000 and set the maximum rate they are willing to pay a lender. Then the auction begins as Prosper lenders bid down the interest rate. Once the auction ends, Prosper takes the bids with the lowest rates and combines them into one simple loan to the borrower. Prosper handles all on-going loan administration tasks including loan repayment and collections on behalf of the matched borrowers and lenders.
Prosper was co-founded by Chris Larsen, co-founder of E-LOAN, and John Witchel, technology entrepreneur. Backed by Accel Partners, Benchmark Capital, DAG Ventures, Fidelity Ventures, Meritech Capital, and Omidyar Network, Prosper has raised approximately $40 million. Prosper’s marketplace platform is patent pending.
Contact:
Prosper Tiffany Fox, Communications Director, 415-593-5416 tiffany@prosper.com
—
Link to Press Release: http://biz.yahoo.com/bw/070912/20070912005454.html?.v=1
Related Articles Related StoresAugust 15th, 2007 — News, Prosper.com
On Prosper an individual that is both a borrower and a lender has been given the nickname blender.
Back in Febuary I wrote about blenders that were late on their borrower loan: Please Close Major Loophole for Deadbeat Lender/Group Leaders.
It seems that after a week or so of the Prosper Forums ranting about this issue and a suspension of a major (>100K) lender for impersonating a Prosper employee, that Prosper has finally said what it will do about the issue…
Here is a diret post from Shira posted on 8/14/2007 at 3:27pm…
Hi everyone,Thank you for raising the issue of late Lender-Borrowers to us.
As of today, all accounts of Lender-Borrowers who are 30+ days past due have been put on hold. This means these Lender-Borrowers won’t be able to place bids or send out group invitations on Prosper until their loans are brought current.
By the end of this year, we expect to have this process automated, but until then we will manually put 30+ days past due delinquent Lender-Borrower accounts on hold.
We are exploring whether and under what conditions state law will allow us to automatically apply lender funds if the lender is a delinquent borrower. We also expect to have an answer to that question by the end of the year.
Beginning with our next site update, borrowers who are also Prosper lenders will be able to apply their Prosper balances to their existing loans themselves, rather than have to move the money to their bank account first.
Sincerely,
Shira
We are exploring whether and under what conditions state law will allow us to automatically apply lender funds if the lender is a delinquent borrower. We also expect to have an answer to that question by the end of the year.
Hi again,At the present time, we feel we cannot keep a person from their money. However, all transfers on held accounts must be initiated by Prosper. It’s the same issue as the state law conditions: we are exploring whether state law allows us to truly hold funds or apply them to delinquent loans. I’m sorry if this is an unsatisfying answer. As I said above, we expect to have an answer to this issue by the end of the year.
As for group leaders who are also delinquent on their loans, they will also be addressed in the automated solution we are working on for year-end.
I hope this clarifies your questions.
Thanks,
Shira
August 8th, 2007 — News
BankServ powers innovative Lending Club person-to-person lending and borrowing platform
SAN FRANCISCO, 7 August, 2007 — BankServ, worldwide experts in electronic payments, today announced its part in the successful launch of Lending Club’s collaborative person-to-person (P2P) lending platform. Lending Club has implemented BankServ’s Magex Payment Platform, ACH reporting and cash management solutions.
P2P banking and payments is set to be a major growth industry. The BankServ solutions have been deployed to support Lending Club’s innovative, online facility that brings a new financial service to various online communities (including university alumni groups, social networks, and professional organizations). The Lending Club solution offers users the ability to get a loan, fully online, at a lower rate than from traditional sources. Lending Club manages user authentication, credit checks and loan processing, and, through its LendingMatch™ technology, matches up groups of compatible lenders and borrowers.
“We set out to find a company that could support our P2P service and provide us with ACH reporting and cash management facilities that would seamlessly integrate with the other components of Lending Club’s technology, namely credit analytics, portfolio recommendation, profile matching, authentication and collections. We recognized that BankServ’s Magex Payment Platform has become the standard for any company that is serious about launching a P2P financial service,” comments John Donovan, COO, Lending Club. ”Many payment industry experts are convinced that P2P lending will define a new era in electronic payments. There is a clear need for new solutions that improve service and convenience to consumers, and Lending Club has achieved this with its innovative LendingMatch™ technology,” said Mary Ellen Putnam, Vice President of International Business, BankServ. “We are pleased that the BankServ technology offerings have been selected by Lending Club and look forward to working with this impressive team as they build on their success.”
“We were looking for a partner that brings experience in P2P, the payments industry, and that also understands the need for speed and efficiency. BankServ has proven technology and services that made them an obvious choice for Lending Club,” concludes Donovan.
—
Link to press release: http://www.bankserv.com/press/news/2007/aug_7_2007.html
Related Articles Related StoresAugust 5th, 2007 — News, Prosper.com
Prosper and SBI Holdings to Establish Prosper in Japan and Other Asian Countries
San Francisco – August 6, 2007 – Prosper (www.prosper.com), America’s first people-to-people lending marketplace, and SBI Holdings, Inc., a holding company for SBI Group, the financial innovation leader of Japan, today announced an agreement to form a joint venture to facilitate the launch of Prosper in Japan and explore other Asian markets.
“As Prosper takes the first step toward expanding to Japan, we’re confident SBI is the optimal partner to navigate the regulatory landscape and successfully launch and operate the Prosper marketplace in the region,” said Chris Larsen, co-founder and Chief Executive Officer of Prosper.
“With over $79 million in funded loans and more than 380,000 members, Prosper is the leading person-to-person lending marketplace,” said Hayato Kameta, incoming Chief Executive Officer of the joint venture. “SBI Group’s experience and resources in both the Internet and financial sectors, combined with the vision and infrastructure of Prosper, makes this joint venture well positioned to develop and execute a business plan which meets the regulatory and business environment in Japan and other Asian countries.”
SBI Group has a market capitalization in excess of $8 billion and consists of 65 consolidated subsidiaries and 12 affiliated companies, including 9 public companies. SBI online finance business include SBI E*Trade Securities Co., Ltd., Morningstar Japan K.K. and E-LOAN as a business unit of SBI Holdings. To find out more about SBI Holdings, Inc., visit www.sbigroup.co.jp/english/.
About Prosper
Prosper (www.prosper.com), America’s first people-to-people lending marketplace, was created to make consumer lending more financially and socially rewarding for everyone. Prosper’s membership consists of over 380,000 people from across the country. Since launching in February 2006, over $79 million in loans have been funded in the marketplace.
The way Prosper works is intuitive to people who have used eBay. Instead of listing and bidding on items, people list and bid on loans using Prosper’s online auction platform. People who register as Prosper lenders set the minimum interest rate they are willing to earn and bid in increments of $50 to $25,000 on loan listings they select. In addition to criteria commonly used by institutional lenders, such as credit scores and histories, Prosper lenders can consider borrowers’ personal stories and group affiliations. Groups on Prosper are instrumental in bringing people together for the common goal of borrowing at better rates. People who want to borrow on Prosper create loan listings for up to $25,000 and set the maximum rate they are willing to pay a lender. Then the auction begins as Prosper lenders bid down the interest rate. Once the auction ends, Prosper takes the bids with the lowest rates and combines them into one simple loan to the borrower. Prosper handles all on-going loan administration tasks including loan repayment and collections on behalf of the matched borrowers and lenders.
Prosper was co-founded by Chris Larsen, co-founder of E-LOAN, and John Witchel, technology entrepreneur. Backed by Accel Partners, Benchmark Capital, DAG Ventures, Fidelity Ventures, Meritech Capital, and Omidyar Network, Prosper has raised approximately $40 million. Prosper’s marketplace platform is patent pending.
—
This may or may not be a sccop since I agreed that the “news is under embargo until 12:00 am EST on Sunday.” Thus I would suspect that this news is being widly released. Regardless, I am publishing this news as soon as I am allowed.
Related Articles Related StoresJuly 18th, 2007 — News, Prosper.com
Options Grow For Investors To Lend Online – More Sites Join Prosper.com In Luring the Risk-Tolerant; Hammered by Late Payments…
Here is the segment on ProProsper:
Related ArticlesOver a dozen independent Web sites, mostly geared to Prosper lenders, have emerged in recent months to help lenders make better investing decisions. ProProsper.com, for example, helps lenders determine what the market rate would be for a particular loan, while Wiseclerk.com provides a “loan aging” tool that tracks historical default rates of Prosper loans. Eric’s Credit Community (www.ericscc.com) maintains a list of the 10 largest lenders on Prosper (some of whom have close to $700,000 invested) and offers tools that can help users track the moves of other lenders.
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