I have followed Prosper for close to a year (see my earlier posts here and here,) and used it as a lender playing with $1000 to get a feel. So far, here are the statistics on my experience:
Loans:My APY, after fees is 18.04% - way more than what I have earned in other investments. Now, clearly this is not a typical experience and my appeptite for risk is higher. However, with this positive experience I am likely to lend more, and even consider borrowing when needed.
Active loans: 14
Principal loaned: $657.79
Avg. interest rate: 18.52%
Late/Bad loans: 0
What is Prosper doing right? And wrong.
- Listen: Prosper has reached out to its user community. I have been contacted for a user study and they have incorporated feedbacks from that session.
- Growth at the right rate: Prosper is building a community and that requires time. The fact that they are dealing with real money requires trust to be built between Prosper and the users, and between borrowers and lenders. Over time, these borrowers and lenders will become the evangelists.
- Ease of use, not AJAX: Yes, I love sexy UI's as much as the next valley guy but if you want a community site that welcomes everyone including 75 year old rich retiree as a lender, you want to keep the site easy and accessible.
What do you think about prospects of Prosper? Do you prefer Zopa? What advantages do they enjoy over banks?