Prosper has 50,287 lenders who have made at least one loan. But most of those lenders are essentially irrelevant to Prosper's originations, due to their extremely small portfolio sizes. It has always been the case that relatively few lenders provided Prosper with the bulk of the money it has lent. For example, let's look at the top 25 lenders (by dollars lent) on Prosper. By number, this group represents less than 0.05% of all Prosper lenders. However, this group lent more than $11 million -- more than 6% of the $179 million lent on Prosper since its inception. Put another way, almost 1 dollar out of every 16 ever lent was provided by just the Top 25 lenders.
You would think that it would be crucial to Prosper for this group of lenders to keep the money taps open. So how many of the Top 25 have at least one active bid now that Prosper has been re-open for almost a week? Exactly
TWO -- and one of those is Chris Larsen, Prosper's co-founder and CEO.
Of course lending is currently only open to California lenders. But 7 of the Top 25 are in CA. Thus, excluding Chris Larsen, only
ONE out of the 6 Top 25 lenders eligible to lend have chosen to do so.
I wonder why that is. Perhaps the performance of these mega-lenders answers that question. The best performer of the Top 25 has a projected LendingStats ROI of 6.73% -- certainly not bad. But the worst performer of the Top 25 has a projected ROI of
-17.75%. Even if you discount that lender (Muleshoes) because if his unusual lending style, the second worst of the Top 25 has a projected ROI of
-9.49%. Only three of the Top 25 have ROI's > 4.41%. Four of the Top 25 have
negative ROI's. The median (i.e., half did better, half did worse) ROI of the Top 25 is 2.34%. They would have earned more than that in a 100% liquid, FDIC-insured internet savings account.
Well, maybe the satisfaction with Prosper is better with the next group of big lenders. Instead of looking at the Top 25, let's look at the Top 100. Numerically, this group constitutes less than 0.2% of all Prosper lenders who have ever made a loan. But this group of lenders collectively provided over
$23 million of Prosper's $179 million lent so far. That is almost
13% of every dollar ever lent on Prosper -- more than 1 dollar out of every 8 ever lent.
So how many of the Top 100 lenders have at least one active bid? A mere
Five -- including Chris Larsen.
30 of the Top 100 are in California and thus eligible to lend. So excluding Chris Larsen, only 4 of the 29 Top 100 lenders eligible to lend have chosen to do so. Of course, the fact that
29 of the Top 100 lenders have
negative projected LendingStats ROI's might have something to do with that.
The numbers are even worse as you look at larger groups of top lenders. There are 438 lenders who have lent more than $50,000. Of those Top 438, a mere
10 have at least one active bid. Although it is way too much work to see how many of those 438 are in California, assuming the same percentage as with the Top 100 are, one would expect 131 California lenders in the Top 438 -- so 10 is quite a paltry number. Although perfectly understandable considering that the median projected ROI for the Top 438 is a pitiful 1.46%.
Lastly, one would expect 300 California lenders in the Top 1000 if the same percentage applies as with the Top 100. So how many have at least one active bid?
17.
These numbers should be frightening to Prosper. Presumably, however, Prosper figures that it can just find a new crop of suckers with extremely deep pockets. It will be interesting to see whether it can.
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Topic: Miniscule # of Prosper's Biggest Lenders Are Bidding (Read 11291 times)