Prosper, one of the largest peer-to-peer lending companies operating online, has released lending statistics for the last half of 2009. Compared to the first half of the year, with only $28,100 in loans while awaiting SEC registration, Prosper lent almost $8.9 million post SEC compliance. Additionally, the company has met regulatory compliance needed to lend in Mississippi. Now only 22 states to go. It appears that Prosper was able to recover from their dark period of regulation and subsequently suspended lending activity.
The expanded activity at Prosper pinpoints the benefits and flexibility of individualized lending. While traditional bank lending has weakened during the recession, peer-to-peer lending has continued to do well providing an avenue for individuals to pay of debt. In fact, Prosper has reported that over half of the loans from the past six months are for debt consolidation. After paying off debt, borrowers use funds for business ventures, home improvement, and education.
While regulatory burdens hindered Prosper’s ability to lend and grow, they have rebounded since compliance. It is impossible to know how much lending could have occurred during the company’s dark period but we do know that lending has resumed. Indeed, Prosper has offered opportunities for individuals to pay down debt and build up their credit scores. Yet, there are still many states that Prosper does not lend to. Only time will tell if Prosper can comply with all of these regulations and and continue to prosper as an alternative form of lending.
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