Are groups dinosaurs?

Wiseclerk · Site Admin Joined: 22 Nov 2007 Posts: 56

The percentage of listings that are members of a group is dropping continously. At the mmoment the level is below 20%:
http://www.wiseclerk.com/reporting-a-percentage_group-l-percentage_group-m-all.html

Is there anybody that thinks that groups will play a major role at Prosper in the future (or at any other p2p lending service)?

How would the group model / group leader role have to change?
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vinnie · Joined: 22 Nov 2007 Posts: 6

Clearly Prosper is trying to de-emphasize groups. I started my small group a few months ago (Pr*mise Keepers, short name pkeepers) in order to test a new model.

I invited selected would-be borrowers (usually B-E rated) and told them that I would bid up to $4000 on their loan, essentially guaranteeing funding, if they gave me contact info, allowed me to verify employment, and spoke with me on the phone. I put about 2-3 hours into each loan, and am carrying about $10K from these folks.

Right now, the group is on pause as the loans mature. I will likely re-activate in a couple of months. I think it is a good model for those who have the time, and can capitalize enough of a loan to get it funded. Folks on the forums originally criticized this as "pump and dump" but in fact I have always held between $400 and $3000 of each loan myself.

Prosper threw a wrench in this plan when they restricted prior bid info to loan holders. However, they have opened it back up to allow group leaders to see their member's history... this is essential.

The other model I think will persist is the small group of genuine friends, like the hawaiian group (darn, with the forums closed I can't find the GL's name...). That is rather unique, and even more time intensive.