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Why I Love Being a Prosper.com Lender

by MapGirl on 12/7/07

I come from a background in international development and I’m a huge fan of Muhammad Yunus / Grameen Bank and the concept of micro-loans and empowering entrepreneurs. I was so excited when Prosper started because it’s the first large-scale micro-loan concept I’ve seen in the US. I believe that micro-loans and the social community around borrowers will make them responsible, low-risk investments. So far, my borrowers have not disappointed me. (Disclosure: I’ve got $200.00 spread across 4 loans.)

Growing up Korean-American, I saw how pooling community finances made a real difference in helping new immigrants get start up capital to buy their own businesses and live out the American dream.  How can immigrants with zero credit history get a bank loan? They can’t. By drawing on their cultural bonds, and loaning one another money, it was possible to avoid banks and their credit risk models that aren’t willing to take a bet on a man because they like the cut of their jib.
The strength of social networks and shared dreams makes everyone work towards the same goals, and being in a Group can take lending and borrowing to next level and strengthen a community with shared prosperity.

Being a bit of an iconoclast, I love the idea that Prosper lies just outside of traditional banking and circumvents some of the hide-bound thinking of regular banks. I’m willing to take a risk on a person at 19% APR when their local bank isn’t. Heck, so are another 100 people and that’s how a borrower can get a real loan.

I wish Prosper had been around 5 years ago. I could have really used it. I walked into my credit union with my high-interest rate credit cards (19% and 20+%), filled out a loan application and literally cried tears of joy when they said they could give me a 5-year installment loan at 15% APR. It was a godsend for me, but I wonder if Prosper.com existed back then, whether or not I could have done better in the open market. Who can say, but I do know that my situation was like that of many loan listings out there to consolidate credit cards. Getting a loan when you think a bank won’t make one can make all the difference in a person’s psyche.

I love it when loan listings have budgets and monthly cash flow statements. Listings like that show me that people really care about getting their financial house in order. That’s so exciting. I love sharing in people’s financial dreams of owning a home, a business, going to college, etc. It makes me feel a little like a philanthropist, but with tangible, re-investable returns. And who doesn’t like that?


Mapgirl writes daily on her financial goals at Mapgirl’s Fiscal Challenge.


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4 Responses

Mark | January 21st, 2008 at 11:41 am

I love Prosper too! It was like a dream come true for me. It makes me feel good to help other people with loans. I like to make money, but making money while helping others is a really great feeling!
So far as of this date 1-21-2008. I have 23 loans making a return of 14%+ with only 2 people being late so far and no defaults.

Ames Tiedeman | April 27th, 2008 at 8:31 pm

I am a new Prosper Lender. I look forward to some good returns and also to helping out some folsk in need.

Rionn Fears Malechem | May 22nd, 2008 at 10:45 am

Yeah, I just joined up and I’m excited about it. I too made the connection to microlending, but the idea there is that you’re lending to a group of mutually liable people. Community-based lending may give us some of our best returns, though, as people get desparate for cash in the coming depression.

mick | June 5th, 2008 at 11:32 am

I love prosper. This is true capitalism, and a true free market. no manipulation or good ole buddy network. people helping people, and all getting their reward. It is perfect. Sorry it took so long but glad it is finally here. If we would have had prosper instead of giant paper mills in the mortgage market there would be no subprime meltdown! Power to the little people!! As usual we have more sense than all of the giant institutions combined!

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