Tuesday, October 21, 2008

Media touts p2p lending - ignores upheaval

The Associated Press published an article yesterday - Peer-to-peer lending — Weighing benefits and risks. Although the article was published on October 20th, it seems like it was written at least a week ago. There is no mention of Prosper's lending halt. In fact, despite the quiet period, the author quotes Prosper's CEO. Here is an excerpt:

Getting loans through peer-to-peer lending isn’t as easy as you may think. These days, many have just as much trouble getting loans on Prosper.com as they might at a bank.

That’s because the lending site is getting a new wave of people with good credit who were turned away by banks, said Chris Larsen, the company’s CEO.

“So lenders are pickier about who they fund,” he said.

Only 5 percent of people with credit grades that fall in the bottom three brackets (out of seven) now get loans on the site, with about 40 percent of loans going to people with scores in the two highest brackets.

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