Best-in-Category Seasoned Returns Increase to 10.69%, Drive Record Growth
SAN FRANCISCO, CA--(Marketwire - Oct 20, 2011) - Prosper.com, a peer-to-peer (P2P) lending marketplace for personal loans that brings together creditworthy borrowers with individual and institutional investors, today released its P2P lending results for September 2011. The results showed a 367% year-over-year increase in loans funded compared to the third quarter of 2010, marking 12 consecutive months of growth. Prosper also announced that its strong risk performance has resulted in an increase in its seasoned returns to 10.69%*, the best in the P2P lending industry.
Prosper is the only P2P lender to report seasoned returns. Seasoned returns are a more conservative and accurate indicator of returns, reflecting a loan or portfolio of loans that has matured enough for the performance to have stabilized. This return is thought to more accurately reflect the true underlying return of the asset.
"Prosper's strong credit engine and risk scoring system continues to deliver the industry's highest and most consistent seasoned lender returns, which in turn are driving Prosper's exceptional growth," said Chris Larsen, Prosper's chief executive officer and co-founder. "As investors seek an alternative to the traditional banking model in this yield-starved environment, they are finding P2P lending to be a compelling asset class, and Prosper to be the reliable, trusted P2P lending company."
Additional data for September include:
- Record September origination volumes;
- 11.4% compound monthly growth rate over the last 12 months;
- Actual annualized loss rate of 5.48% continues to beat forecast loss rate of 7.14%**, indicating that Prosper continues to forecast conservative loss rates for investors;
- 90% of loans are 3-year term loans, delivering short-duration, fixed-income cash returns for income-oriented investors;
- High-credit quality consumer loans: 737 average Experian Scorex PLUS*** credit score for first time borrowers.
"P2P lending represents a tremendous opportunity for the many individual and institutional investors seeking an alternative source of high-yield current income from a reliable, trustworthy investment source," said Joe Toms, Prosper's chief investment officer. "Our complete reporting transparency, rigorous analytics, and consistent track record of producing superior risk-adjusted returns are a clear validation of the robustness of our credit model and our experienced risk performance team. This powerful combination has allowed us to deliver industry-best returns and create a compelling investor experience."
Debt consolidation, home improvement and small business-related loans remain the leading loan categories on Prosper.com. To learn more about Prosper's lender returns, competitive personal loansand small business loans, visit http://www.prosper.com.
* Net Annualized Returns represent the actual returns on Borrower Payment Dependent Notes ("Notes") issued and sold by Prosper since July 15, 2009. To be included in the calculation of Net Annualized Returns, Notes must be associated with a borrower loan originated more than 10 months ago; this calculation uses loans originated through November 30, 2010. To calculate Net Annualized Returns, all payments received on borrower loans corresponding to eligible Notes, net of principal repayment, credit losses and servicing costs for such loans, are aggregated then divided by the average daily amount of aggregate outstanding principal for such loans. To annualize this cumulative return, the cumulative number is divided by the dollar-weighted average age of the loans in days and then multiplied by 365. Net Annualized Returns are not necessarily indicative of the future performance of any Notes. All calculations made as of September 30, 2011.
** Annual loss rate represents the actual losses on Borrower Payment Dependent Notes ("Notes") issued and sold by Prosper since July 15, 2009. To be included in the calculation of annualized loss rate, Notes must be associated with a borrower loan originated more than 10 months ago; this calculation uses loans originated through November 30, 2010. To calculate the annual loss rate, the net credit losses corresponding to eligible Notes are aggregated then divided by the average daily amount of aggregate outstanding principal for such loans. To annualize this rate, the cumulative number is divided by the dollar-weighted average age of the loans in days and then multiplied by 365. The forecast loss rate represents the Estimated Annual Loss Rates we provided for the borrower listings corresponding to the Notes included in the calculation of annual loss rate.
We only include Notes that have been outstanding for at least 10 months in these calculations because we believe loss rates on less seasoned Notes are less reliable indicators of likely loss rates on such Notes over their lifetime. For comparison's sake, the annual loss rate on all Notes booked from July 15, 2009 through September 30, 2011 is 3.9%. All calculations made as of September 30, 2011.
*** Average Experian Scorex PLUS credit score of loans originated on the platform from July 15, 2009 through September 30, 2011. The average is weighted by the originated dollar amount of the loan.
Prosper Marketplace Inc., a peer-to-peer lending marketplace that brings together creditworthy borrowers with individual and institutional investors, allows people to invest in each other in a way that is financially and socially rewarding. Individual and institutional investors invest in minimum increments of $25 on loan listings they select. In addition to credit scores, ratings and histories, investors can consider borrowers' personal loan descriptions, endorsements from friends, and community affiliations. Prosper handles the servicing of the loan on behalf of the matched borrowers and investors.
Prosper was co-founded by Chris Larsen, co-founder of E-LOAN. Prosper has raised $74.85 million in venture capital and is backed by financial and technology luminaries including, Jim Breyer of Accel Partners; Tim Draper of Draper Fisher Jurvetson; Jerome Contro of Crosslink Capital, CompuCredit; Omidyar Network; Capital One Co-founder Nigel Morris of QED Investors; Court Coursey of TomorrowVentures; Larry Cheng of Volition Capital.
Notes offered by Prospectus.