Portfolio Plans — The Good, The Bad, and The Ugly | P2P Lending, Peer to Peer Lending, People to People Lending

#1Sam on 11.18.07 at 8:52 am

Prosper does not offer any method for lenders to liquidate and leave, other than to stop lending and wait for their existing notes to mature or default. They need to create a process for other lenders to buy other lenders notes that are not in default.

For Prosper to succeed they need to provide lenders with outside audits of the their accounts and a method for lenders to leave.

#2Kevinon 11.18.07 at 7:36 pm

Sam — With all due respect and without disagreeing with your sentiment. Success is relative. P2P Lending is a brand new paradigm. Providing a secondary market is not easy.

Prosper has filed an S1 with the SEC in order to facilitate the secondary market: http://www.rateladder.com/2007/10/30/prosper-files-s1-with-sec/
As for outside audits? I am not sure I understand. I receive data from prosper daily. The data is everything available to the public. Sites such as Eric’s CC, Lending Stats, and my own ProProsper open this data up to the public. What do you mean outside audits?

#3Homer on 11.19.07 at 5:59 am

Two things to note:

1) I don’t believe some of the slices of the portfolio plans won’t hit on enough or any loans

2) Diversification – Portfolio plans don’t do anything to help diversification. I believe that’s a large problem for prosper now. A $1000 loan portfolio (20-25 loans @ $50 per loan) has each loan representing 4-5% of the portfolio, and the RIO is will vary wildly.

#4Kevinon 11.19.07 at 6:15 am

True a $1000 portfolio can’t be diversivied enough. I think that a portfolio should have no more than 2% of the portfolio in a single loan. That requires a $2500 portfolio at the $50 minimum bid.

I am not sure I agree with #1, but time will tell.

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