Prosper has just finished its best month ever for loan originations – we have reached $20.2M in loans for April, and $500M since inception. April’s performance was achieved with the largest volume and the highest average loan amount in history with 1,969 loans and $10,277 respectively. This amount is a 34% growth over March, 2013 and 74% year over year from April, 2012.
Over the past week, many of you have asked about the changes in loan volume. We have seen two trends; first, there have been fewer B through HR rated loans available. Second, loan origination volume through Prosper’s platform has actually gone up, as you can see above. To explain these seemingly contradictory trends, I’d like to start by saying that I believe the industry has reached an inflection point. Peer-to-peer lending is increasingly accepted as a viable investment class. Both retail and institutional lenders are realizing that peer-to-peer loans represent a very interesting and potentially profitable way to obtain unprecedented access to investing in consumer loans. As a result, the industry (not just Prosper) is experiencing a spike in demand. We are aggressively ramping borrower marketing campaigns to generate more loan inventory to meet that lender demand. We are also looking closely at the borrower user experience and application process over the coming months.
All in all, these short term challenges are a positive development for the industry. As we grow, we will help more consumers get their loans funded and therefore offer our lenders more opportunities to expand their investments in consumer loans.
As I mentioned in my April update, we introduced a whole loans program in a beta period for our institutional investors. This has been going well – over $5.8M in loans originated through the whole loan pool in April. This makes up about 28% of loans originated through the platform in April and the remaining 72% originated through the fractional loan pool. On May 3rd we will officially add the whole loans pool as a permanent part of our service.
Here are some details on how it will work:
Prior to posting times, Monday thru Friday only, a subset of randomly selected loans will funnel into a whole loan pool, while all others will post normally into the standard, fractional loan pool. Those loans in the whole loan pool will remain there exclusively for a brief 45 minute period of time. If the loans are not purchased from the whole loan pool within 45 minutes, they will funnel into the fractional loan pool at regularly scheduled posting times, becoming available for funding on the standard Prosper platform. On Saturdays and Sundays all loans will funnel into the standard loan pool, giving our retail lenders the opportunity to bid on all loans available during that period.
This new process is in line with market conditions and enables us to offer whole loan buyers a solution to meeting their mandate and specifications without disrupting the retail lender experience. Additionally, for loans in the fractional loan pool, lenders will now be limited to 75% funding, ensuring that all retail lenders continue to have equal access to a large number of loan options.
Now back to April. In addition to a record month in terms of loan originations, we also made some great progress. We launched a new logo and identity. We would love to hear what you think. As promised, we increased the loan cap from $25,000 to $35,000. Many of you have noticed that this change also included removing our one year loan option. The reason for removing this is simple; one year loans are not in high demand by our borrowers. We will continue to make changes and enhancements like these to balance the needs of both lenders and borrowers.
We also welcomed back our Washington lenders. We appreciate your patience while we worked with the Securities Division of Washington’s Department of Finance to obtain approval and reopen peer-to-peer lending in Washington.
Finally, we are approaching the deadline to transfer to the new enhanced API service we introduced to our lenders back in March. The feedback on this has been tremendous and we are transitioning everyone over. The last day to transition to our new API for lenders is May 1st. If you’re interested in this, please email us at email@example.com. If you’re already using it, great! A new password functionality in the settings section will be available in May. Stay tuned.
More exciting things are still to come over the next couple months.
Improved collections: We are still very focused on increasing the success of our collections. We have made several changes over the past couple months to increase call intensity and work closely with delinquent borrowers. We continue to enhance this service and will keep you updated here as changes are made.
Document Update Functionality: We have begun development on a tool that will allow our borrowers to upload documents directly to our site. This will help to streamline the borrower experience and allow our verification team to move more quickly on verification initiatives.
Ramping Borrower Inventory: Over March and April we focused a lot of resources and attention on the lender side of our platform. This has allowed us to onboard a lot of eager lenders. As stated above, in May, we are ramping up our borrower marketing initiatives to meet these new lender needs and will be funneling more and more loans onto the platform.
We are really proud of the progress we’ve made so far, and have many more exciting updates to come as we work to make Prosper the best peer-to-peer lending platform. I’d like to thank everyone who commented on my March post for their thoughtful questions and considerate debate. I’ll be reading and responding so feel free to ask questions or add comments below.
We are very pleased to announce that in working with the Securities Division of Washington’s Department of Finance we have achieved approval status for Washington lenders once again. Starting first thing tomorrow morning, Washington lenders will have access to all lending through our platform. We are happy to welcome everyone back!
We also wanted to give our lender community an update on all state statuses. We are doing what we can to get approval in as many states as possible and to make peer-to-peer lending available to everyone. However, each state has its own set of regulations and restrictions along with a comprehensive application process.
For folks residing in Arizona, or North Carolina – each of these states has securities law requirements that we are unable to meet at this time. Unfortunately, we are not pushing forward with Arizona or North Carolina. In the event that anything changes, we will reassess this opportunity.
Many states have responded individually with a message that conveys a fundamental skepticism for peer-to-peer lending, and it’s unlikely we will receive approval without a shift on these views. These states include Arkansas, Indiana, Iowa, Maryland, Massachusetts, North Dakota, Pennsylvania, and Tennessee. If you reside in one of the aforementioned states and feel so inclined, you can reach out to your local governments encouraging their consideration of peer-to-peer lending platforms.
Similarly, several states who have communicated skepticism of peer-to-peer lending, have required us to withdraw our application when it became apparent that we could not overcome that skepticism in the near term. Thus, we have removed applications from Alabama, Kansas, Kentucky, Nebraska, New Jersey, New Mexico, Ohio, Oklahoma, Texas, and Vermont.
We will continue to push this on our end as peer-to-peer lending grows and becomes more widely accepted across the nation. We appreciate your support and feedback along the way.
It’s been a little over two months since CEO, Steve Vermut and Head of Global Institutional Sales, Ron Suber, joined Prosper’s management team, and this week, I am excited to be joining them full time as President. I wanted to let our community know that we intend to use this blog as a method of communication to continuously inform both our borrowers and lenders of what we are working on here at Prosper, and of what new and exciting things are coming in the near future. It’s important to all of us that our customers understand we are striving to make Prosper a leader in customer service and technology. With valuable feedback from our customers, we are able to deliver products and solutions that will enhance the user experience across the platform.
I want to give everyone an idea of all the exciting things the Prosper team has been working on since bringing on the new management team. In February, we focused on building and launching tools and improvements vital to the platform’s performance. Our new API gives lenders the tools they need to customize their Prosper experience in ways never before possible, and Prosper Funding LLC provides increased security and protection for our lenders. We also extended our customer service hours to provide more one-on-one support for more hours of the day.
As we come to the end March, we’re excited to report $15.1 million in loan originations, a 60% growth over February and our best month since October. We also project $25 million in new loan listings on the platform this month. In fact, at the time of this post, there are 200 new loans now available to lenders.
We have also been looking at various ways to improve our service and product offerings for our retail and institutional lenders, as well as for our borrowers. Here are some of the priority items that we’re focusing on over the next few months (in no particular order):
• New Prosper Logo/Identity: Along with the technology enhancements to our product, on April 2nd we are launching a rebranded web experience including a new logo and identity. We have been working on this for a while and are excited about the changes. Let us know what you think.
• Improved collections: Over the past several months, we have focused on improving collections by increasing call intensity, and working with our delinquent borrowers to be the payment of choice during tax refund season. As a result of these changes, we have had 3 consecutive record months of collections. Moving forward, we will be adding a new collections agency and will send delinquent accounts to collections at 16 days past due rather than 31 days past due. This will enable us to expand our call coverage and skip tracing capabilities, which will provide better results for our lenders.
• Washington State (and more): We are currently engaged in communication with the Security Division of Washington’s Department of Finance and hope to reopen the platform to Washington lenders very soon. We apologize for the inconvenience to our Washington customers – the blackout is a result of the implementation of Prosper Funding LLC’s New Note Offering. With this implementation, we have also added West Virginia and Michigan, and plan to have several additional states join the platform in the near future.
• Whole Loans: In April we are launching a whole loan product in beta for our institutional lenders, which will be separate from our traditional pool of fractional loans. The beta version of this product is in test mode and we will communicate more details as they develop.
• Additional Improvements: Some of the many other things we are working on are a new IRA trading option on Foliofn, an increase in the loan cap on the platform to $35,000, enhancements to our Automated Quick Invest tool (AQI), and expansion to both our customer support and technology teams.
Steve, Ron and I are committed to creating a transparent relationship with our borrower and lender communities. This asset class and market place are changing rapidly. We will continue to make ourselves available to answer any questions. Please check back here regularly as I publish new posts with updates as well as gather questions and feedback from our community at large. We welcome any comments and/or questions below.
At the beginning of March, we announced the launch of our new, enhanced API service for lenders. The new API gives our lenders the tools they need to customize their Prosper experience, as well as build more robust tools in less time. Among other features, the new lender API service encompasses a RESTful interface which supports OData query operations, making it easier and more convenient for our lenders to code against. With the new API, we also offer more than 550 data points to each credit profile as well as individual Note details including specifics about payments and reasons for default.
As a result of launching this new API, effective May 1st, the existing API service will no longer be available. Over the next month, all lenders have the opportunity to convert and map their applications to the new API service, which offers a much more comprehensive set of data points, including access to raw listing data and enhanced data sets for analysis and reporting.
To obtain access to the new API for your lender account, please email us at firstname.lastname@example.org. We always welcome your comments and feedback below as well.
Today, we are excited to provide our lenders with a new API service that includes a comprehensive set of tools designed to help lenders meet their investment expectations. With more than 550 data points, including access to raw listing data, lenders can now build the tools they need to customize their Prosper experience, including enhanced data sets for analysis and reporting, along with the ability to bid through their own system.
The new API was developed in partnership with some of Prosper’s most active lenders, who have provided valuable feedback that has helped shape the features and tools available in the new API. Over the past month, these lenders have tested the API and worked closely with us to help improve its functionality so that we can provide the best experience possible for our lenders.
“The improvements to the new API are a game changer for Prosper and for lenders who are looking to build custom tools for managing their investments on the platform,” says Michael from Nickel Steamroller. “We are especially excited about the expanded data points as well as the speedier performance, which lets us build robust tools in less time.”
Key improvements and benefits to lenders through the new API include:
Expanded access to credit profile data points. The new API offers more than 475 credit bureau variables and more than 550 data points total.
Easy access to Notes, with a more comprehensive break down of principal, interest and other fees.
Details down to the individual Note level, including specifics about payments and reason for default.
Improved filtering and querying that make it easier to use specific criteria to search for Notes. For example, only C rated Notes less than $10,000.
For lenders that want to build their own tools, they now have access to the data through a RESTful interface.
The RESTful interface of the API supports OData filter query operations.
Unique login credentials for API users restricted to reviewing and investing funds only. This means no access to bank information or account settings so you can keep your API tools separate from your Prosper account.
The new API is the latest in a series of recent enhancements for our lenders as we work to provide the best possible peer-to-peer lending experience. Most recently, we unveiled new protections for our lenders, and in December, we released new data enhancements, which included expanding investor data access as well as the underwriting information preview. Keep an eye out for future enhancements to our lender services coming soon.
If you are a lender on the Prosper platform, and are interested in learning more about the new API and obtaining access for your lender account, please email us at email@example.com. We always welcome your comments and feedback below as well.
Notice: Blogs and other materials posted on or linked from this page that use the name "Prosper" generally use that name to refer to Prosper Marketplace, Inc. if published before January 31, 2013 and to refer to Prosper Funding LLC if published on or after February 1, 2013.
As of February 1, 2013, the Prosper marketplace was transferred by Prosper Marketplace, Inc. to Prosper Funding LLC, a wholly-owned subsidiary of Prosper Marketplace, Inc. From and after February 1, 2013 Prosper Funding LLC is the sole obligator of Notes offered and secured by loans made through the Prosper marketplace, including Notes originally issues by Prosper Marketplace, Inc. prior to such transfer. Prosper Marketplace Inc. contiinues to provide services to Prosper Funding LLC relating to loan and Note servicing, and may interact with borrowers and investors in relation thereto as agent of Prosper Funding, LLC. Except where otherwise noted, throughout this website "Prosper" refers to Prosper Funding LLC including acting directly or through its agents.
All personal loans are made by WebBank, a Utah-chartered Industrial Bank. All Prosper personal loans are unsecured, fully amortizing personal loans.
Notes offered by Prospectus. Notes investors receive are dependent for payment on personal loans to borrowers. Not FDIC-insured; Investments may lose value; No Prosper or bank guarantee. Prosper does not verify all information provided by borrowers in listings. Investors should review the prospectus before investing.