Note from the Publisher: We’ve featured Ron Suber of Prosper a few times in the past and he recently did an interview with Crowdfundinsider, talking about the new landscape for P2P lenders. The one comment that stuck with me was “(I)f you see a person who works for an online lender … Just give them a hug or buy them a drink as they deserve it for making it to 2017”. It’s not been an easy path for P2P lenders, and Lending Club’s debacle last year certainly didn’t help matters, but they play SUCH an important new role as a alternative to bank lending, post Jobs Act. They also offer investing opportunities that were not available before. We applaud Ron and the Prosper team for perservering and wish them much success in 2017!
“In the world of alternative finance, one US industry was probably happy to see 2016 end.
Online lending, both marketplace lenders (née P2P lending) and balance sheet platforms, hit the proverbial brick wall during last year. Rumblings of a more challenging environment picked up in Q1 of 2016. The second quarter brought the departure of Lending Club’s founding CEO. Institutional investors ran for the door.
Prosper, the number two marketplace lending platform in the US, was not spared the struggle. Having originated $7.9 billion in loans since inception (as of September 2016), a number of their largest investors “paused or significantly reduced their purchases” of loans.
As investor demand declined, Prosper endured a decline in transaction fee revenue. The company predicted a further decrease in transaction fee revenue in the fourth quarter of 2016 vs 2015 as well….”
Read Full Article & Interview at Crowdfundinsider