IMHO the high dollar amounts are going to be the death of Prosper 4.0. I think they will result in high defaults - burning a lot of folks.
I also believe P2P is a raging success IF borrowers are not anonymous. Too bad there doesn't seem to be an easy legal way around that... (um... 'cept in groups I suppose?)
Cheers,
JGuide
I have to disagree with you on the higher loan amounts. I think its just not cost effective for Prosper to be doing collections on so many smaller loans. Higher loans mean they can make fewer loans and then be able to dedicate more time to collections on those fewer loans.
This strategy has already proven to work well with lendingClub who has been averaging >10k loans for I think over a year now and the average size loan there continues to increase while the rate of delinquency seems to be decreasing.
Yeah, a lot of potential resources get thrown out the window with anonymity. Groups are definitely a great thing for that, but with the fixed interest rates and near 100% of loans funding the benefit of groups has been greatly diminished and borrowers don't have much incentive to join anymore. However, that might change once the # of listings gets up and not all are funding.
I do hope they find a way to bring back the auction and also bring back HR's. That would really give borrowers an incentive to join groups again. It would also bring a lot more blenders back.
On the positive side, Prosper's strategy of trying to gauge the risk of a lender as accurately as possible given available information seems to be working extremely well so far.