Ever since major U.S. consumer lending marketplace Prosper.com brought on a new management team earlier this year, loan originations have been growing at a rapid pace, increasing from under $10MM in January to $33MM in September. October is off to an even faster start, and if trends continue, this is shaping up to be Prosper’s biggest month yet.
The graph below shows Prosper’s monthly loan origination volume since late 2005. As you can see, there were some rough patches in 2009 and late 2012, but the trend for 2013 has been monotonically positive.
This growth can likely be attributed to multiple factors. First, Prosper has made improvements to its own processes recently, including simplification of the loan application process and a migration to industry-standard credit scores. In addition, overall awareness of Online and P2P Lending has increased substantially over the past several months, with a flurry of news articles and TV appearances touting the benefits to borrowers as well as the attractiveness to investors as an asset class.
At Orchard, we monitor the Online Lending marketplace in order to have a consistent view into investable loan inventory on the major origination platforms. Looking at Prosper’s daily origination volume in the month of October leads us to expect a huge month for them if trends continue.
In the above graph, there have been 7 weekdays so far in October, out of a total of 23 for the month. If Prosper continues to originate $2.2MM per weekday, they will be on track for a $50MM month!
Of course, origination volume depends on a strong pipeline of borrower applications and listings in Prosper’s marketplace. At Orchard, we have a real-time dashboard that shows all loans available for funding on Prosper at any given time. The screenshot below shows growth there as well, periodically reaching ever-higher plateaus.
Prosper’s recent growth represents major progress for them as well as great promise for the industry overall. As Online Lending enters further into the mainstream consciousness, the entire ecosystem benefits from having multiple high-quality originators. We look forward to seeing these trends continue.
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