Turn to Your Left at the End of the Sky

Peer-to-peer Lending

The internet continues to exhibit an untrammeled elimination of the middleman. A new company, Prosper.com, now allows direct person-to-person lending. I have set up standing orders (one of the best features of the site as it allows automatic bidding on the loan requests) and have created a loan portfolio with an even risk distribution. People submitting loan requests are graded with a risk rating from AA all the way down to HR (high risk) and NC (no credit rating). The risk ratings are based on the credit scores obtained from the credit agencies.

As of writing, Prosper has 90,000 members and has originated over $18 million in loans.

It appears that there is currently a far greater demand for loans than there is a supply of capital bidding on each loan. The implications for my risk-adjusted return are not yet clear, but I think it’s a great idea. 


October 21, 2006 - Posted by | Internet, Investing

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: