U.S. Microlending Milestone

February 18, 2011

The online lending site, Prosper.com, is celebrating the fifth anniversary of its launch. And as a "thank you" to its members, the online marketplace offered borrowers a special deal yesterday: Prosper said it would cover the second monthly payment on those loans submitted yesterday, up to a max of $300.

When the press release announcing the offer crossed my desk I thought I'd check out the loans on Prosper. And to my dismay, discovered Prosper isn't licensed to operate in Maryland. I had planned a small experiment, comparing returns on equal investments in Prosper and the NASDAQ. But that will need to wait.

Lacking licenses to operate in Maryland and a handful of other states doesn't seem to have hampered the online marketplace. Since opening in 2006, Prosper.com said it has attracted 1 million customers and $220 million in funded loans.

Plus, it's managed to raise $57.7 million in venture capital from "financial and technology luminaries." Prosper's CEO and Co-founder, Chris Larsen, previously co-founded E-LOAN, an early player in the Internet sphere.

"I couldn't be more excited about the future of the industry," Larsen said in a statement announcing the company's five-year mark. "While traditonal banking and Wall Street credit continue to leave many people without access to funds, we are seeing an increasing number of loans funded on Prosper."

17.2% of Americans reported carrying prepaid debit cards in 2009

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