Last week I discussed the changes that happened at Prosper on December 19th. So, here we are 10 days later and I thought it was time to update everyone as to what has been happening. It has been a very interesting holiday season for everyone at Prosper I am sure.
If you look at the numbers below you can see the total loan origination numbers for the last couple of weeks. By the way, these numbers are all publicly available in the statistics section of Prosper’s site (you gotta love the transparency of p2p lending). As you can see things were going along just fine for the first week after the new lending model was introduced. They had a blip just after Christmas but it looks like things may be back on track now. The December 29th data is as of 4pm EST and it may actually increase.
I spoke with someone at Prosper this morning and while they acknowledged that loan listings are way down, they said part of the reason is the difference between the bidding system and the new fixed rate system. With the bidding system loans would stay on their site even after they were fully funded because they waited until the auction period ended. Even so, as of this afternoon there were only 17 loan listings available and all of them were rated D or E (as in high risk). Not much choice for p2p investors wanting to diversify their risk.
I have heard a number of negative comments about Prosper on this blog, on forums as well as on their Facebook page. This afternoon Prosper made this statement on Facebook:
We greatly apologize for the delay in answering posts. Rest assured that we are not in danger of going out of business, dying, or closing down. Quite the contrary — we’re confident that the recent changes we’ve made to our platform will greatly improve the lender experience on Prosper.com. At the risk of being repetitive, here’s why the number of listings has temporarily dropped off: 1) Listings are now pulled from the site as soon as they reach 100% funding, 2) We no longer list HR listings, 3) We now set interest rates that are commensurate with the level of risk and therefore, listings that previously were underpriced—and would not have been funded anyway—are no longer on the platform, and 4) The time of year. We believe, come January 3, you should see numbers rise dramatically.
Time will tell I guess. Let’s hope for everyone’s sake Prosper can dramatically increase the number of loan listings. I know one of my readers who wants to have a contest to predict how many loans will be available on Prosper at the end of day on December 31st (he thinks it will be 12). My guess is 21.
I am willing to give Prosper the benefit of the doubt for now. The holiday season is not a typical time of year for many businesses, but next week with the new year and the holiday season behind us I expect to see some improvements. I will be keeping an eye on their progress and will report back in a couple of weeks.
One final point worth noting, if you want a loan and have good credit now would be a great time to apply for a loan on Prosper. Loans with a good Prosper rating are getting funded in less than 48 hours because there is such little competition for investor dollars.
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.