I am not very familar with Prosper, nor with the industry but based on quick research, it looks like they were catering to higher risk profiles. Plus there business model seems a bit unclear to me as it looks like they take a one time-fee per loan, regardless of its being reimbursed or not. While I understand the logic here, in this industry you may want to consider having more skin in the game.

I guess my point in this post was that the timing could be right to cater to lower risk profiles and make money out of such a website. In a nutshell, I would assume that they key success factors for such a site would be: scale, risk model and price / cost leadership (the overall fees can be cheaper to that of a traditional bank due to smaller operations), I tend to believe that the current trends mentioned in the post could facilitate attracting more consumers with lower risk profiles (it looks like the bulk of users of Prosperhad pretty risky profiles) and reach scale, hence catering to two out of the three aforementioned success factors, hence making the model more attractive today. In other words, since banks are not lending anymore, the perception of such ventures could move from being a second rate alternative to something more mainstream hence catering to the general public instead of solely riskier profiles. Just assumptions…

Let me know if you find more. I hope that helps.

Cheers,

Romain

P

http://uk.zopa.com/ZopaWeb/

See you in “La Cave”