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September 2008 Market Survey Results for Prosper Personal Loans

by Prosper on 10/14/08

Prosper, America’s largest people-to-people lending marketplace for personal loans, released results for September 2008.

Chris Larsen, discusses what role Prosper will play and what trends we are seeing in the wake of this full blown crash of the global financial system.

Market Commentary By Prosper Co-founder and Chief Executive Officer, Chris Larsen

In the midst of one of the greatest economic crises America has ever faced, and on the heels of last week’s Federal Reserve report indicating that for the first time in over a decade consumer borrowing significantly contracted, people are naturally asking what role Prosper will play and what trends we are seeing.

Although it’s a bit too soon to point to Prosper data that correlates directly with the financial meltdown that has only begun to unfold, there are some noteworthy trends that have accelerated since the credit crunch began 14 months ago that are relevant to the current environment.

The biggest trend that continues in the Prosper marketplace since the credit crunch began last summer is that the percentage of borrowers with sterling credit that are listing and getting funded on Prosper remains at record levels (See “Mix of Funded Borrowers” Table). We expect this trend to continue particularly as more lenders on Prosper have become more conservative in their bidding strategies; and as more people, even those with the very best credit, are having their credit card limits reduced and home equity lines cancelled, and are being turned down for auto loans and other personal loans.

Another key trend we’re experiencing is that as consumer borrowing from traditional financing sources is shrinking, Prosper is experiencing solid growth. Year-to-date, the number of loans in terms of units is up 24% over the same time period last year, and up 37% in September 2008 compared to September 2007. At the same time, loan originations year-to-date in terms of dollars have increased 8% over the same period last year, and are up 7% in September 2008 compared to September 2007.

At a time when every sector in the economy seems to be under pressure and shrinking, the growth Prosper has experienced is very respectable. However, some may wonder why there is a disparity between unit growth and loan dollar volume growth. The answer lies in the average loan amount being funded on Prosper. Year-to-date the average loan amount is $6,047, down 13% or $925 compared to the same period last year. In September 2008 the average loan amount was $5,544, down 23% or $1,631 from September 2007. This indicates that lenders on Prosper are being more cautious by directing their bids toward listings with lower requested loan amounts.

All of these trends on Prosper are significant and interesting, but far more important in this time of economic upheaval is the opportunity for Americans to revitalize the spirit of It’s A Wonderful Life; to channel the essence of Bedford Falls and George Bailey; and to “do well by doing good.”

September 2008 Prosper People-to-People Lending Market Survey

Membership and Loan Volume Statistics

 

 

 

Sept.

2008

 

Sept.

2007

 

YTD

2008

 

YTD

2007

 

Since

Inception

New Members

 

21,338

 

28,683

 

280,621

 

299,549

 

818,749

Funded Loans ($)

 

$5.8 million

 

$5.4 million

 

$66.7 million

 

$61.8 million

 

$175.7 million

Funded Loans (Units)

 

1,038

 

758

 

11,024

 

8,868

 

28,409

Average Loan Size

 

$5,544

 

$7,175

 

$6,047

 

$6,972

 

$6,184

Daily Average Number of Borrower Listings

 

2,189

 

2,300

 

2,372

 

2,214

 

1,771

 

 

 

 

 

 

 

 

 

 

 

 

Mix of Funded Borrowers

 

 

 

Sept.

2008

 

Sept.

2007

 

Sept.

2006

 

YTD

2008

 

YTD

2007

 

YTD

2006

 

Since

Inception

Prime

 

45%

 

30%

 

21%

 

43%

 

29%

 

26%

 

35%

Near Prime

 

50%

 

62%

 

55%

 

52%

 

58%

 

50%

 

54%

Sub Prime

 

5%

 

8%

 

24%

 

5%

 

13%

 

24%

 

11%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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