Christina Rexrode has published a detailed look at peer to peer lending for the Charlotte Observer - Peer-to-peer sites connect lenders with borrowers. Reaction to the article among veteran lenders on prospers.org was very complementary. The national media typically makes glaring errors when writing about peer to peer lending. This article, however, was different. Oak_Hill_Fire said it was "not a purely fluff piece." Lender j9359 called it, "Probably the best written and balanced piece on Prosper I've read" and DakotahFury said, "it was one of the better articles I've seen."
Christina and I exchanged several emails and phone calls regarding the article but kept missing each other due to our busy schedules. I hope this blog was helpful to her as she gathered information for her article. Her article is organized around five parts - the connectors, the risks, the borrowers, the lenders and the future. Read the whole thing here.
Speaking of the peer to peer lending and the media, there are three other articles over the weekend that are worth mentioning.
Los Angeles Times - Know the risks before investing in start-ups
In this Q&A the author recommends considering Prosper as a way to diversify investments to someone who is interested in investing in a friend's new company.
"If you're interested in seed-round investing, consider attending angel investor networking events to get a sense of the range of opportunities available. If you're interested in high-yield debt returns, Jacobs said, consider peer-to-peer lending websites such as Prosper, at www.prosper.com, where you can place many small loans across a portfolio of customers with different risk profiles."
Oddly, the same author did not mention the peer to peer lending sites when responding to a different question about lending money to family and friends.
"If you're making a very small loan, it might not pay to go through the time and expense of drafting legal documents or seeking collateral, unless there's a high possibility of default -- in which case you may want to reconsider."
I'd argue that Prosper and the other peer to peer lending sites are the perfect platform to use when lending money to family and friends.
The Press Enterprise - Riverside residents recommend social lending Web sites
"Returning from a trip to Africa in early 2007, Bruce Hammond, of Riverside, wanted to help out people in some of the poor villages he had just visited. He did some Web research, and heard from friends about a nonprofit social lending site called Kiva.org, which had been mentioned on book tours and TV shows by former President Clinton, Oprah Winfrey and other celebrities....Some like Kiva are being used for purely philanthropic purposes, but experts say other for-profit sites are becoming increasingly popular meeting places for qualified borrowers and lenders."
Sun Sentinel - Lending networks take off on Web
"In a credit crunch, borrowers who need the money may ask friends and family or use their credit cards. But there's another group you might want to try: People you meet over the Internet."