zcommodore

Today, Prosper will begin verifying loans that will originate on February 1st.  This means that for all practical purposes, January, 2008 is over, which means we can take a look at the performance numbers for how many loans originated this month already.  So, what do we find?

First, here's a graph of total dollars of loans originated each month:

And now a graph showing the number of loans originated along with the distribution of grades:

As you can see in each one, there has been a big spike in the month of January.  Both in numbers and in total dollars, there were more loans originated in January, 2008 than there have been since May 2007.

I don't know what has changed but from Prosper's perspective, I'm sure they're happy to see the increase.  On the other hand, I'm somewhat curious if they've relaxed some standards relating to their approval procedures.  I participated in 2 loans this past month and both of them were approved very soon after they ended.  I'm not really worried because in both cases I've interracted with the borrowers for many months before bidding on their loan so I'm sure they will pay it back.  I don't know about any of the other 1048 loans though.

I've said it before and I'll say it again, Prosper has a long way to go before they reach profitability.  From my discussions with other lenders, it is estimated they need $30-40 million per month of business if they hope to break even.  $7 million is a long ways from that amount.  Showing a 1-month increase is a good start.  In addition, they've raised origination fees on most grades of borrowers so that will help lower the total needed per month.  Prosper may be coming out with a resale service at some point so that should help increase revenue as well.  In the mean time, an increase in total loans is a positive sign in the right direction.  It's a whole lot better than being flat month after month.