Wednesday, September 12, 2007

Prosper Monthly Market Summary

Prosper has published their first monthly Peer to Peer Lending Market summary. The market survey, surprisingly, covers just their own lending market. There's some interesting statistics that we'll digest in the next few days, but I want to highlight the market commentary provided by Chris Larson, CEO:

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.

That's an interesting spin on the sub-prime melt down. Beyond that, the statistics are interesting for observing already existing trends, but do not appear provide insight on where a lender should be bidding. It's an interesting read for a stats junkie, and Prosper provides a way to sign-up to their mailing list (I'm a sucker - I did it).

On a public relations front, however, this looks like a good move for Prosper, so I'll give it a cautious thumbs up until a few more issues come out.

Update: If you're wondering why it hit all the blogs about the same time, Prosper's Communications Director e-mailed the release out to us. That being said, here's a few more commentaries on the Market summary (updated as I spot them):
  • Prosper Lending Review: "All things considered, I think that this monthly data report from Prosper will be valuable. It's good to hear Chris Larsen's analysis and it gives a regular public way for Prosper to report their growth and success."
  • Prosper Forum
Update 2: Prosper has finally posted the press release to their website (and formatted the tables nicely).

1 comment:

Tom said...

You got an email? I didn't, but I did sign up for future emails.