Prosper’s Legal Collection Test Result Fail Expectations

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Prosper has published a review of the results of a legal collection test. In November 2007, Prosper had selected 74 loans with an outstanding principal balance of approx. 704,000 US$ to conduct a test for a legal collection strategy instead of including them in a debt sale (which at that time was the usual Prosper procedure for bad debt).

The cases were handed over to the law firm Hunt & Henriques.

Since then there was none or little official communication about the progress. Relying on other sources, P2P-Banking.com reported last year that several of lawsuits in these cases were lost.

The new blog post by Prosper describes in detail which steps were undertaken and what results the measures yielded. The only step that can be counted as somewhat successful was the pre-legal phase of letters threatening lawsuits which recovered about 40,000 US$ payments. 66 accounts then went into the legal process.

Surprisingly 16 cases (24%) had to be closed because the debtor moved out of state (3) or Prosper was unable to obtain service.
On a sidenote: Interested parties have raised the questions why Prosper did not apply to the court to allow service by publication, which seem to legal and often used in California as P2P-Banking.com was told. In this case, after other measures failed the plaintiff runs an classified ad in a newspaper. It does not matter if the defendant actually sees this newspaper ad.

The remaining 50 cases further dwindled when Prosper deducted cases with bankruptcies and lowered credit scores which it deemed not worthwhile. Continue reading →

Kiva Loans Surpass 100,000,000 USD

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Congratulations to Kiva. They have tackled another impressive milestone: more then 100 million US$ total loans funded since inception. And the growth curve is pointing straight upwards. 60 million US$ were funded in the last 12 months.

Quoting today’s numbers from Kiva’s statistics page:

Total value of all loans made through Kiva:$100,223,910
Number of Kiva Lenders:585,070
Number of countries represented by Kiva Lenders:185
Number of entrepreneurs that have received a loan through Kiva:249,619
Number of loans that have been funded through Kiva:142,801
Percentage of Kiva loans which have been made to women entrepreneurs:82.72%
Number of Kiva Field Partners (microfinance institutions Kiva partners with):106
Number of countries Kiva Field Partners are located in:49
Current repayment rate (all partners):97.88%
Average loan size (This is the average amount loaned to an individual Kiva Entrepreneur. Some loans – group loans – are divided between a group of borrowers.):$404.87
Average total amount loaned per Kiva Lender (includes reloaned funds):$171.34
Average number of loans per Kiva Lender:4.91

Will Kiva run out of goals now? Definitly not:

But we believe this is only the beginning . . .

Kiva is about dreaming big. The entrepreneurs on the website dream about big business; our Field Partners dream about financially including all of the poor; Kiva Lenders dream about ending poverty.

Kiva was a big dream before the idea of lending to someone on the other side of the world became a reality. Now we have big dreams about making Kiva the world’s hub for alleviating poverty.

This is a quote from a Kiva blogpost from October, which also give the strategic goals for the next 5 years:

  1. Raise 1,000 million US$ in loans over the internet
  2. Reach 2 million entrepreneurs around the world
  3. Realize our own self-sufficiency in the process.

Kiva has my support. Let me know, if I can do anything to win your support for Kiva.

Lending Club has New Graphic Statistics Page

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Lending Club has a new graphic displays on it’s statistic page. Prominently featured are loan purpose, range of investor returns and total loans funded. Users can click on any graphic to enlage it. I found the ‘Loan details’ page more interesting then the ‘Highlights’ page, for it visualizes differences in trends depending on loan purpose.

Signup Bonus

New lenders signing up at Lending Club via this link get 25 US$ to lend.