zcommodore

Just over two weeks ago, Prosper's update included guidance to lenders based on actual Prosper data.  I normally collect monthly loan statistics at the end of each month but I decided to do some early checking and found some interesting information I couldn't wait to post so here it is.

Below is a graph I've posted before showing the relative percentages each month based on credit grade for the numbers of loans originated in the month.  Here is the graph again but with November's numbers based on only the first half of the month.

Notice how the lines for AA-B grades of borrowers are going up while all other grades are going down.  Prosper's lender guidance, limited though it is, indicates most lower grades to barely be worth the risk for lenders even though the rates they tend to offer are much higher on average.  As far as I'm concerned this was the best change for lenders yet.

Here's another look at the numbers but with the credit grades grouped together similar to the way Prosper groups them in it's monthly newsletter.

For the first time AA-A grade borrowers are getting a decent share of the loans on Prosper.  Once again, you can see the other grades are going down.

Keep in mind that the November numbers aren't even all in since we're only half-way through the month.  Also, since the new information happened very late last month, there were some loans that were funded prior to the change or shortly afterwards so those loans are probably still reflected in the new information.  Additionally, many lenders who use standing orders only may not have noticed all the recent changes if they don't do manual bidding since the information isn't readily available unless you manually click the bid button.  Regardless, the information is rather dramatic in my opinion.

I hope we see a corresponding decrease in numbers of defaults over the next few months with the new information.  Also, and better yet, I hope we start seeing a lot more prime grade borrowers showing up now that it looks more likely that they can get funded here.