Earlier this week, Mark Gimein wrote a great article on TheBigMoney.com detailing, statistically, how risky person-to-person lending really is. I’ve always known it to be peer to peer lending or social lending, but the article calls out the riskiness of Prosper.com, the first and one of the largest of the peer lending networks.
To look at the results of Prosper’s loan marketplace, though, is to see not a solution to the credit crisis, but a microcosm of it. Loans to unqualified borrowers; reliance on mathematical models that turn out to be a lot less useful…
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Borrowers, Contrary, Credit Crisis, Default Rates, High Interest Rates, Lenders, Lending Networks, Lot, Microcosm, Peer To Peer, Peer To Peer Lending, Person To Person, Reliance, Sky, Surprise, Takeaway
