A Huge Month for U.S. Peer to Peer Lenders

There are no summer doldrums when it comes to p2p lending. The wildly gyrating stock market as well as a turbulent bond market where fixed income yields keep dropping contributed to a huge month for Lending Club and Prosper. Both companies saw big increases in their monthly loan volume with double digit percentage increases over the previous month.

Lending Club’s August P2P Loan Volume Over $23 Million

Let’s start with Lending Club where loan volumes jumped from $20.6 million in July to $23.0 million in August. The typical last day bounce (when much of the institutional money is invested) was a bit lower this month – about $2.9 million by my calculations. This is well below the $5,7 million that came in on the last day of July. But the month as a whole was so strong they didn’t need a huge last day to break any records.

Here is the chart for Lending Club’s loan volume over the last 18 months. The black line is the three month moving average.

Lending Club P2P Loan Volume

I emailed Lending Club to get some comments about the great month they had and this is what Scott Sanborn, Chief Marketing Officer had to say:

We have seen a historic inflow of investment capital this month – more than 2x our previous record – driven both by new investors joining the platform and existing investors significantly increasing the size of their accounts. Professional, fixed income investors have cited Lending Club as a great alternative given the dreary outlook for bonds and the Feds announced intention to keep rates low. Retail investors have told us that they appreciate the stability of Lending Club vs. the roller coaster ride that the equities market is continuing to deliver.

Prosper’s P2P Loan Volume up 14% in August

Over at Prosper they also continued their steady climb in loan volume. August marked their 12th month in a row of increasing loan volumes and as you can see in the chart below August saw a big jump over previous months. This was helped along by their largest investor, Worth-blanket2, who kicked in around $1.8 million in new money bringing their total to just over $5 million since coming on board in May. What was also gratifying to see was several other investors (Reflective-rupee, Scrappy-diversification7 and Capital-halo1) contributing over $100,000 in new money in August according to Lendstats.

Below is Prosper’s chart for the last 18 months that shows the rapid growth they have experienced since the start of the year.

Chart of Prosper's P2P Loan Volume

When I contacted Prosper for some comments about their stellar month this is what Joseph Toms, Chief Investment Officer had to say:

We continue to see investors responding to our industry-leading risk adjusted returns of 10.6%. This month was another record month driven by institutions discovering Prosper – and this pipeline continues to grow nicely. We had a 14% increase in total loan volume ($) and a 17% increase in number of loans funded. Equally important, our investors are maintaining a conservative posture by focusing nearly 80% of their money in 1 and 3–year maturity paper.

It will be interesting to see if this increased volume can be maintained in September which is a holiday shortened month. We are probably overdue for a break in this rapid growth but we will see.

  • Peter Renton is the chairman and co-founder of LendIt Fintech, the world’s first and largest digital media and events company focused on fintech. Peter has been writing about fintech since 2010 and he is the author and creator of the Fintech One-on-One Podcast, the first and longest-running fintech interview series. Peter has been interviewed by the Wall Street Journal, Bloomberg, The New York Times, CNBC, CNN, Fortune, NPR, Fox Business News, the Financial Times, and dozens of other publications.

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