Wikipedia Wednesday: Prosper.com

January 10th, 2007 • Related • Filed Under • by admin

[Editor's Note: We've decided to start a new feature on Getting Green. Every Wednesday night we are going to feature an article by perhaps you! We are going to showcase one article relating to money from Wikipedia so that you can better share in the knowledge of the masses!]

Today we’re going to highlight the person-to-person online lending service, Prosper.com

Prosper (web site)

Prosper is an online auction website where people can lend money directly to each other. Borrowers set the maximum rate they wish to pay and lenders set the minimum rate they wish to receive. Prosper matches borrowers with lenders and manages loan repayment.

Prosper Marketplace was launched on February 13, 2006. In its first 6 months of operation, Prosper handled over $7.7 million in interpersonal loans. It is officially only open to US residents. The idea for the service is derived from group banking concepts, such as rotating savings and credit associations (ROSCAs). Similarly, Bangladesh economist Muhammad Yunus, founder of the Grameen Bank, won the Nobel Peace Prize for pioneering micro-loans to lift millions out of poverty.

Using Prosper, lenders and borrowers list and bid on auctioned loans. These unsecured loans are amortized over three years, with no pre-payment penalty.Prosper generates revenue by collecting a one-time 1% fee on funded loans from borrowers, and assessing a 0.5% annual loan servicing fee to lenders. Prosper also publishes performance statistics on the website, which show over $28.8 million in loans as of January 6, 2007. [1] All transactions are in US dollars. Prosper was founded by Chris Larsen, who also founded E-loan, and John Witchel. The company is based in San Francisco, CA and is backed by Accel Partners, Benchmark Capital, Fidelity Ventures, and Omidyar Network.

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