Prosper Keeps Their Rapid Growth Going – Does $124 Million in May

Prosper May 2014

Prosper has maintained their incredibly rapid growth this past month and issued $124 million in new loans in May, up from $100.3 million in April. Even more impressive is that they issued just $25 million in loans one year ago.

You can see the three month moving average (the black line in the chart above) has steepened sharply the last three months. Clearly the marketing initiatives that Aaron Vermut talked about last month are bearing fruit for Prosper.

What is even more important to everyday investors than this impressive growth in loan originations is the number of loans available at any one time. And this increase has also been dramatic. Just three months ago Prosper only had 50-75 loans available to investors on their Browse Listings page – today that number is at 350-400 loans. There are even a few of the higher yielding loans staying on the platform for more than just a couple of minutes. But, as has been the case for months now, the majority of available loans are AA and A grade loans.

Below are some of the stats from loans issued in May. The average loan size is at an all time high of $13,281 and the average borrower interest rate is at an all time low of 14.79%. This means that Prosper is issuing larger loans at a lower interest rate than before as their loan book becomes more conservative. The other data point I found interesting is that, even with more loans available for retail investors, the vast majority of loans originated by Prosper go to their whole loan buyers with just 11% being made available on their retail platform.

Average loan size: $13,281
Average dollars issued per business day: $5.6 million
Percentage 36/60 month loans: 64.3%/35.7%
Average interest rate: 14.79%
Percentage of whole loans: 89.0%
Average FICO score: 699

Note: If you are wondering about the Lending Club numbers this month they have unfortunately stopped updating their new loan data.

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Bryce Mason
Jun. 2, 2014 12:24 am

Idle cash going into Prosper this week. Planning on buying some of that AA/A paper to keep the capital losses low. Great to see so much growth here.

Eric Di Benedetto
Eric Di Benedetto
Jun. 3, 2014 7:29 pm

Looking into the data in a more granular fashion, it appears that a more conservative credit policy is not the reason why Prosper is issuing larger loans at a lower rate (you wrote: “This means that Prosper is issuing larger loans at a lower interest rate than before as their loan book becomes more conservative”). What is really happening is that Prosper is pumping up originations by lowering interest rates (making loans more attractive to borrowers) while increasing risk by increasing loan size (+10% in just 3 months) and going down to lower FICO (minus 5 points in the last 3 months). Clearly, the credit policy has become more aggressive, rather than more conservative, in order to generate “incredibly rapid growth”….

Ruh Roh
Ruh Roh
Jun. 11, 2014 11:36 am

opening up the credit box to get that hockey stick working for their VCs! This will not end well