Entries from May 2007 ↓

Sleeping much

May 29th, 2007 — P2P Lending from Matt Flannery @ Kiva Chronicles

The scarcity mentality has been steadily run out of this organization — for the better. We are 11 strong now and are moving to an office 3 times the size of our current facility. In a month we will be 4 blocks down the road. We are still in the mission for sure; however, we are dangerously far from Blowfish Sushi. This could potentially put the 70% off Sushi deal at risk..

My life has definitely taken on a different rhythm. I haven’t pulled an all-nighter in months and I go to bed at 11 or so every night. All the mad energy of our years in business I have been channeling back into my relationship. Jessica is just about to graduate from the Stanford GSB so we have been spending most of our times together relishing our last days living in a cottage in the woods near Stanford. It’s been amazing. In June, we’ll be moving back to the city a short walk from where we work.

We were on CNN last week. A short 2 minute segment keeps rotating during Anderson Cooper airings. It’s playing over and over today and causing quite a stir on our website. As of 11 AM we’ve already done about $20K in business. This won’t be a record day, but close.

CNN called us ‘heroes’. This is awkward, to say the least. I’ve had to deal with a series of wise cracks from old friends who by chance saw the segment. I look emotional in the piece. I was emotional. Those CNN interviewers really know how to get you in a sensitive mood.

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Group Announcement

May 27th, 2007 — Group news from Beyond_destiny @ Vets Helping Vets

Dear all,

VHV has closed to new members until further notice due to personal reason(relocating to west coast).

The group leader will continuously monitor the Prosper marketplace and several important changes are anticipated to release upon re-opened of group.

Borrower with current listing has been referred to ‘High risk that should not be’. Please contact its group leader per invitation only.

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LendingClub launches social P2P lending site on Facebook

May 25th, 2007 — Lendingclub from p2plendingnews @ P2P Lending News

LendingClub, a new person-to-person lending site based in Sunnyvale, CA, launched during last night’s Facebook f8 event in San Francisco. LendingClub, headed by founder and CEO Renaud Laplanche, has raised $2 million in angel funding, and has about 18 employees.
For the moment, the site is only accessible through Facebook, but will eventually be available to [...]

Kiva.org May Meetup!

May 23rd, 2007 — P2P Lending from Fiona Ramsey @ Kiva

We’re well overdue for a San Francisco Kiva.org Meetup, so, we thought we’d combine two great reasons to get together: welcoming Agents of Change to San Francisco and hanging out with the people that make Kiva.org happen - that includes you!!!!Agents o…

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Kiva.org is awarded $345,000 grant from Kellogg Foundation

May 21st, 2007 — P2P Lending from Fiona Ramsey @ Kiva

Congratulations! Kiva.org has received a $345,000 grant, to be distributed over 2 years, to fund Kiva.org’s due diligence program.The W.K. Kellogg Foundation was established in 1930 “to help people help themselves through the practical applications of …

My first blog post (it’s me honest!)

May 18th, 2007 — General from Siobhan @ Zopa

Following much talk and general belief that Zopa could be and should be environmentally sound, I thought it was about time we put something down in writing and then we’d all have to do it. We’re not a huge organisation (yet!) so our impact is not great at the moment but we want to [...]

A message from our Field Partner in Iraq

May 17th, 2007 — P2P Lending from Fiona Ramsey @ Kiva

We received an email today from the Chairman of our Field Partner in Iraq, Al Aman Center, which included a message to share with all Kiva Lenders:Once again on behalf of Al man and Krikuk people, I would like to express our profound appreciation to th…

DTI Uproar

May 17th, 2007 — P2P Lending from Mike @ Prosperous Land

There was some uproar on the lender side when Prosper changed the listings to lump all debt-to-income numbers great than 100% in a >100% category. John Witchel took to his blog to defend the decision.
There is no material difference between 2345235% DTI and 2345236%, agreed? So any variation of the statement “more granularity is always better” is simply false (except in some abstract tautological

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Virgin USA acquires CircleLending, enters US banking market

May 17th, 2007 — CircleLending from p2plendingnews @ P2P Lending News

CircleLending, the Massachusets-based facilitator of P2P loans, announced on May 15 that Virgin USA, the North American investment arm of Virgin (the UK-based Richard Branson company) had acquired a majority stake. Terms of the transaction were not disclosed.
CircleLending hasn’t been included in the discussion here in the past because, although they do facilitate loans between [...]

Where the streets have no names and the poor have no chance

May 16th, 2007 — Kiva, economy, good governance, kendall mau, latin america, microfinance, microfinancing, nicaragua, poverty, prisma from Ramon @ Ramon's Kiva Blog

It’s been a while. Work has been busy (my company was just bought by our largest competitor), and although I’ve been able to contribute various posts to KivaFriends, I haven’t been as active as I’d want to.Reading through Kendall’s reports on the state…

Support WEdia and Kiva.org in New York this Friday!

May 16th, 2007 — P2P Lending from Fiona Ramsey @ Kiva

Are you going to be in New York this Friday, May 18th? Then support WEdia - and Kiva.org - at a guaranteed amazing time at Southpaw.WEdia is a non-profit media company committed to giving a voice to the world’s poor and marginalized populations. They…

Thanks for the “Fund Rager”!

May 15th, 2007 — P2P Lending from Fiona Ramsey @ Kiva

Kiva.org recently celebrated its second celebrity fundraiser last weekend at a sweet little soiree hosted at Entourage star Adrian Grenier’s house. Kevin Connolly (Entourage) and Willie Garson (Sex and the City) were also present, along with some of th…

San Francisco Kiva Lenders - save the date to meet Agents of Change and your local Kiva.org staff!

May 14th, 2007 — P2P Lending from Fiona Ramsey @ Kiva

If you haven’t been following Agents of Change - you should be!Agents of Change are a Canadian non-profit group currently riding their way from Vancouver to Tijuana to raise money for Mexican entrepreneurs through Kiva.org.The 25 riders (and their supp…

Identity Protected

May 13th, 2007 — Iraq from Matt Flannery @ Kiva Chronicles

This we had the first Iraqi Businesses on the site. Our partner in Iraq is Iraqi Al-Aman center / Kirkuk . They are a USAID-funded MFI that is currently being protected, in part, by the US military.

Check it out. This man is using his loan to rebuild his electronics store after it was ruined by terrorists. His face has been masked in Photoshop in order to protect his identity.

This entrepreneur is a young man who owns a small computer and CD shop in Kirkuk. Two months ago, terrorists attacked his shop, and it was totally burned to the ground.

He wants to get back to work with the help of a loan from Al-Aman. He has two adorable children and he wants to send them to school. His son is 7 years old and his daughter is 5 years old. Al-Aman is very focused on helping this business, and wants to get the entrepreneur back to work. The Al-Amam staff is excited to see him get back to work and make money while paying back the loan.

Note: This entrepreneur is from a volatile region where the security situation remains unsettled. Personally identifiable attributes of this entrepreneur have been altered to protect him or her (i.e. blacking out portions of the entrepreneur in his/her picture, altering his/her first or last name, etc.).

Microfinance has a reputation as being relatively immune to political crises. Micro-borrowers operate in the informal sector and often buy and sell goods that fulfill the most basic needs of a population. In times of crisis, needs traditionally met through more formal channels often are largely shifted to more informal means. Kiva will be a good place to turn in the next few months to see if this dynamic plays itself out in Iraq.

The Iraqi loans went live on the site last week and were funded in an average of 13 hours. In about a half a day, our user base funded about $9000 in Iraqi loans. These days, the average loan takes about 1.5 days to fund on Kiva.org, so the Iraq factor turned out to be quite an accelerator. I guess political instability can be a positive within Kiva’s inverted economy…

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Talking About the Debt Sale Process

May 11th, 2007 — General from jwitchel @ jwitchel

I wanted to start with a little background on the process of debt sales. The industry standard for debt sales is to bundle many loans and sell them in large batches rather than to sell individual loans to lots of different buyers. Prosper’s debt sales are also done in this manner. Here is how the debt selling process works: 1. Talk to potential buyers to generate and gauge interest. Identify select group of potential buyers to receive bid package. 2. Put a bid package together that includes information about the company, origination of the loans and a data file where potential bidders review the characteristics of the loans for sale. No personal identifying information on individual loans is provided. 3. Receive bids and select a buyer. Prosper faces a number of challenges in the marketplace when selling loans. The biggest challenge is the volume. There needs to be a sufficient number of loans to sell in order to generate enough interest in the portfolio to get an attractive price. A smaller volume of loans will attract fewer quality buyers, resulting in a lower selling price, than you would get with a larger volume of loans. Prosper’s small volume of loans for sale makes it a challenge to find quality buyers, so Prosper accumulates loans to sell until there is sufficient volume in order to get better pricing. Loans that are more than 120 days past due and have not yet been sold continue to be collected by the agencies until they are sold. Another challenge is the unique nature of the Prosper loan. There is nothing like it in the marketplace and it is essentially a new asset class. This makes it difficult to price, because there is no track record on the success of post-sale collections. It is different from credit card debt, which has a long history of debt sales that buyers rely on when pricing the debt. These challenges will be overcome as volume grows and debt sales are done more frequently. Every sale helps to establish Prosper in the marketplace with buyers and over time we hope to have a core group of buyers for our loans. One issue that’s come up for our lenders is the uncertainty of the timing of the debt sale process. So I wanted to address that directly. We expect to complete the next debt sale in the first week in June so you should expect to see a update in your accounts shortly thereafter. We will then establish a regularly quarterly sale until such time that the volume is large enough to move to monthly. Therefore you should plan to see a debt sale in September and again in December. Finally, there are a few loans floating out there that are really old (like 10 months) and appear in your accounts like some sort of forgotten loan. They are not forgotten and they should all be cleaned out on this upcoming sale. We’ve modified our process so that should not happen again. If your account still shows one of these cases after the June sale please contact customer service. Anyway, thank you for all your feedback on this issue. Debt sales and collections are heavily regulated parts of our business with many existing players and processes unaccustomed to new entrants like Prosper. I will try to get a similar post about collections up in the next couple of weeks, but let me close by saying we have a lot of wood to chop in the business of collections. It’s critical to the success of Prosper and we know that.

First Iraqi entrepreneurs funded on Kiva.org!

May 11th, 2007 — P2P Lending from Fiona Ramsey @ Kiva

Congratulations to the first Kiva Lenders to loan to Iraq!The first nine loans to Iraqi entrepreneurs have been posted to Kiva.org, and were all funded within hours! The Kiva Field Partner in Iraq has told us how excited they were to see the loans fun…

Mixing it up in Vegas (baby)

May 11th, 2007 — New stuff, Technology, web 2.0 from Dave @ Zopa

Zopa has been working with Microsoft for a few months now - looking at ways in which we can use some of their new Windows Live services to provide useful tools for our members. As a result of this, they were kind enough to invite me over to Las Vegas the other week to take [...]

Comments On Rate Changes

May 8th, 2007 — P2P Lending from Mike @ Prosperous Land

Has Prosper been violating Texas law?
It clearly states in Chapter 302 that interest rates for personal loans are limited to a maximum of 10% and rates for business loans are limited to 18%. Chapter 305 addresses penalties and remedies for violations. There are some listed exceptions to the 10% rule but I’m not sure Prosper would fall under any of these.

I think Prosper is worried they have been

Kiva.org San Francisco Fundraiser Tonight!

May 8th, 2007 — P2P Lending from Fiona Ramsey @ Kiva

Please join us at one SF’s hottest cocktail destinations to drink, chat, and be merry, while supporting Kiva.org!Where: The Vessel 85 Campton Place, San FranciscoWhen: Tonight! Tuesday, May 8 at 6:00pmA $10 suggested donation w…

The transparency revolution

May 8th, 2007 — General from tom @ Zopa

I was in the sausage section of my local supermarket the other day, mulling the eternal Lincolnshire versus pork and apple debate, and my eyes were drawn to the photo of a farmer on a pack of own brand bangers.
He was a good-looking chappy with ruddy cheeks and a nice smile, but it wasn’t [...]

A big hit

May 8th, 2007 — P2P Lending from Matt Flannery @ Kiva Chronicles

Jedidah and Matt

Last week I heard some terrible news. Jedidah Waigwa, who runs Women’s Economic Empowerment Consort (WEEC) in Kenya, suddenly died from a heart attack.

WEEC works just outside Nairobi and finances small enterprises started by mostly Maasai women. WEEC is our first partner MFI in Kenya and one of our first partners overall. Since beginning with WEEC, Kiva has funded almost $500K worth of businesses with them while helping to reduce their cost structure. WEEC is certainly our first partner to scale up with Kiva in Africa and have paved the way for many more. Jedidah took a chance with Kiva early on and many others in the region are beginning to benefit from the precedent she set last year. We now have around 20 African partners.

I last saw Jedidah in October during the Kiva Frontline trip to East Africa. Since that time, we’ve sent dozens of visitors out there — including Jessica who spent a day with Jedidah in April. During our short friendship, she struck me as an incredibly smart woman who intimately ran every aspect of her organization.

This is the first time in our short history that a good friend and business partner has passed away. From so far away, it’s pretty hard to make this real in my mind. She seemed so incredibly alive last time I saw her.

This is certainly a big hit to Kiva, WEEC and the women they serve.

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Access and Transparency through Person-to-Person Lending

May 8th, 2007 — P2P Lending from Beyond_destiny @ Vets Helping Vets

Chris Larsen

Chief Executive Officer and Co-Founder Prosper Marketplace, Inc.

PowerPoint presentation at

FDIC

Advisory Committee on Economic Inclusion

$6 million - and a new website to celebrate!

May 7th, 2007 — P2P Lending from Fiona Ramsey @ Kiva

Kiva.org has just passed the $6 million mark (loaned) - and to celebrate we’ve released our new website design today. The differences are subtle, but we’ve added some navigational features and generally made the site look a little more snappy. Thanks…

Open Letter #2 - Collections is broken

May 6th, 2007 — General from fred93 @ Fred93's blog

Second installment of my recommendations to Prosper management.Open letter #2 to Prosper.com

First loan fully repaid

May 5th, 2007 — Kiva, economy, mexico, microfinancing, poverty from Ramon @ Ramon's Kiva Blog

Yesterday, I received the following message from Kiva:From: Kiva Date: 3 May 2007 21:43:26 -0700Subject: Loan RedemptionTo: ramonDear Ramon,This email confirms that $25.00 of your loan to Venta de Mercancia por Temporada is now redeemable.This amount…

DTI in the Outfield

May 4th, 2007 — General from jwitchel @ jwitchel

So let’s talk about DTI. Today, I wanted to comment on our decision to cap the DTI with a marker “>100%” rather than the calculated value of something like 2345235% DTI. So let me walk you through the reasoning.There is no material difference between 2345235% DTI and 2345236%, agreed? So any variation of the statement “more granularity is always better” is simply false (except in some abstract tautological sense). What we’re talking about is degrees of precision and at *some* cut off point between 20% and 2345235% it doesn’t matter — it’s all the same. Our analysis led us to conclude based on Prosper’s bidding history, historical underwriting criteria and the collective opinion of a whole lot of folks ’round here is that line is 100%. A DTI of 100%, 101%, 190% or 2345235% puts a borrower deep into the outfield. If you’re going to make bids on listings where the DTI is outside of 100% you need to look at other compelling factors to make the case because all of those numbers tell the same story: “I am a borrower with a heavy debt burden and meager means to carry it”. So that borrower better have a good explanation and you as a lender should be paying attention to the explanation not the ratio.We have seen a consistent pattern of confusion around DTI’s from both young and experienced lenders. We felt capping the DTI at this level solved the problem and implicitly guided lenders to scrutinize other criteria.So to put it out there — we’d be willing to revisit the issue and goose that number up if there was consensus around a different specific number (not just any number higher). Maybe someone could set up a poll. I’m not asking anyone to do my job mind you ;), I’m just offering up an open discussion publicly to the community. As a point of reference when you think about it for yourself, SO’s have a ceiling of 70% on the dropdown and we’ve never received a complaint about that yet. Hopefully this post provides enough background to understand the tradeoffs we’re making.Anyway, have a nice weekend.-john

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More On Rate Changes

May 4th, 2007 — P2P Lending from Mike @ Prosperous Land

Ok, I’ve had time to compare the Google cached version of the state rates page versus the most recent and here’s the goodsAlaska
$1k - $25k: 10.25%
$1k - $25k: 16%
Arizona
$1k - $25k: 24%
$1k - $10k: 24%
$10k - $25k: 30%
Arkansas
$1k - $25k: $10.25%
$1k - $25k: 11.25% APR
California
$2.5k - $25k: 30%
$1k - $2.5k: 19.2%
$2.5k - $25k: 30%
Delaware
$1k - $25k: 10.25%
$1k - $25k: 11.25% APR Kentucky

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It’s just not cricket… well it is actually

May 4th, 2007 — General from Siobhan @ Zopa

So….we have an upcoming social activity. We had a toss up between snooker, rugby (a bit too much effort really) frisbee , cricket and a few others that aren’t worth mentioning.
Cricket ended up winning out in the end, so with two Aussies in the office the world cup part deux talk has been flying back [...]

Tweaks, Bugs and Enhancements

May 4th, 2007 — News & Updates from LendingStats @ LendingStats

Added a customize section to the Total Loans Funded page. You can break that page down by credit grade, DTI, etc. (Got the idea reading through pninen’s Late Loan Statistics thread on the prosper forums.)
The Time Left column has been added to the Active Listings and Listing Picker pages.
Fixed a bug where a borrower’s loan [...]

Print2.0

May 3rd, 2007 — General from Justin @ Zopa

We’re redoing all our printed materials for zopa.com and have just had the wet-proofs through for the letterhead. Eamon and I decided that the print world needed a bit of web2.0 treatment. So here’s the letterhead with rounded corners and shiny surface.

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In Remembrance of Jedidah Waigwa

May 2nd, 2007 — P2P Lending from Fiona Ramsey @ Kiva

We are incredibly saddened to receive news of the passing of Jedidah Waigwa (pictured above with Matt Flannery, September 2006) on Saturday, April 28th. Jedidah passed away after having a heart attack.As Executive Director of Women’s Economic Empowerm…

Welcome

May 2nd, 2007 — P2P Lending from P2P-Loans.com @ P2P-Loans.com

Welcome to the P2P-Loans.com blog. We will track the progress of our group’s listings and loans on this site as well as openly discuss Prosper including its benefits and drawbacks. As always, we continue to look for ways to help our members get their…

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Prosper Upgrades

May 2nd, 2007 — P2P Lending from Mike @ Prosperous Land

I just noticed on the Prosper forums that they did a system update on May 1. Several new features were announced. More of interest to me occurred on the lending side. Prosper revised their lending limits for various states. Lazy clipping below:
Alaska: the rate cap has increased from 10.25% to 16%.
Arizona: the rate cap on loans over $10,000 has increased from 24% to 30%.
Arkansas, Delaware and

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Change of State rate and limit on May 1, 07

May 2nd, 2007 — P2P Lending from Beyond_destiny @ Vets Helping Vets

Alaska: the rate cap has increased from 10.25% to 16%.

Arizona: the rate cap on loans over $10,000 has increased from 24% to 30%.

Arkansas, Delaware and Tennessee: the rate cap has increased.

California: the minimum loan amount has been lowered from $2,550 to $1,000; loans of $1,000 to $2,550 have a 19.2% cap.

Kansas: the maximum loan amount has been decreased to $10,000.

Kentucky: the rate

Zopa wins Webby Award for Banking/Bill Paying

May 1st, 2007 — Zopa from p2plendingnews @ P2P Lending News

The winners of the Internet’s answer to the Cable Ace Awards, The Webby Awards, were announced today. And in true internet style, startup Zopa beat two huge banks in the category of top Banking/Bill Paying web site. The real irony is that Bank of America won the People’s Choice award.
Kudos go to design agency Poke [...]

We Won a Webby

May 1st, 2007 — General from tom @ Zopa

Great news - Zopa has won a Webby, the internet equivalent of an Oscar!
Beating off competition from Bank of America, Chase Online and The Commonwealth Bank of Australia, we lifted the crown in the Banking/Bill Paying category (ironically enough).
Other winners included eBay, Flickr, The Onion, and The Wall Street Journal online - and fellow Brits [...]

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Crazy Pricing in Airlines Industry

May 1st, 2007 — Airlines, US from Sanjeev @ Idle ramblings of a wandering mind...

Have Airlines Lost Their Mind?

I have heard stories of Airlines doing some really crazy pricing. However - I had never came across on such masterpiece face to face - till this week.

I was looking for flights from Detroit to Tulsa, OK. I was not sure of my return date so I tried looking for one-way flights. Horror of horrors - this is what I find. Look at the screenshots below. The first screenshot is for a return flight - leaving May 10th and returning May 20th. The second screenshot is a one way journey (exactly same as the first half of the return journey).

Screenshot 1: Return Flight, Price: $401

Screenshot 2: One way flight, Price: $730

Note that the two flights use exactly the same setup for the common part - same flight no. So - at any rate, the return flight should be expensive than the one way - its the same flight plus some more. However, the reality is completely upside down. The on way ticket is almost double in price than the return ticket that has the one way ticket embedded in it. One might as well buy the return ticket and then throw away the return part of the ticket.

I can’t think of any justification for it - it just does not make sense. Airline industry it seems uses all kinds of sophisticated revenue management systems, yield management systems etc etc. - and after than if they are coming up with this amazingly crazy pricing then something is surely wrong somewhere.

PS> Northwest has been bleeding money past few years and it under bankruptcy now. See any lconnections??

Pre-Vetting Income

May 1st, 2007 — General from jwitchel @ jwitchel

Today’s “hard issue” blog is in follow up to http://forums.prosper.com/index.php?showtopic=24491 in part because it’s a good set of questions and in part to encourage some new voices out there (thanks ManBear and Craig110!)We’re not going to pre-vet income. The reason is pretty simple: if 1 in 10 listings fund than that means our cost to vet income is 10 times our current cost. Our fees won’t support that.It’s important to understand that income on Prosper is self-reported and it’s right there in the credit profile detail. We do vet some income in pre-funding verification, but as a general rule you should assume that Prosper does not vet the income (and most GL’s do not either). Does that make the income and DTI BS? No, of course not. It means it’s self-reported. Some lenders value that data point more than others. Some don’t value it at all. Whether it’s relevant to you depends on your strategy and the other data in the listing. I think Friday’s discussion made it very clear that different lenders view DTI differently. What you do with that data is your choice. And that choice is a big part of what Prosper is all about. Craig110 suggested that we charge a pre-vetting service to borrowers. That’s a great idea from the lenders’ point of view but we don’t want to get into the business of charging up-front fees to Borrowers just for the “privilege” of creating a listing. We’d rather take our fees when the borrower gets their loan. Just like we’re disinclined to charge lenders a “membership” fee for the “privilege” of browsing our listings. It just doesn’t seem right. That said, there’s clear value on both sides and a ‘pre-vetted’ flag would certainly improve a borrower’s funding chances, I just don’t see us offering that service in the foreseeable future.Now if I were a budding entrepreneur I might read between the lines here and see an excellent opportunity to start a 3rd party vetting service. I’m not saying you should, mind you. And you’d have some trust and safety issues as well as some privacy issues you’d have to address if you expected adoption. But I think they could be overcome. You could probably even charge large lenders an access fee for an XML stream. Hmmm. ;)

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