Finance: Prosper experiences diseconomy of scale

Sam Rose blogs about Prosper's lender rebellion.

In a cogent analysis of what's going wrong, what's overlooked is that there seemed to have been a change in the business model from the founders' Yunus-like "invest in your community" philosophy -- where the lenders DID know the borrowers (loan your child's school teacher enough money to move into the district) -- to an inappropriate scale-up that compromised a sound business model designed to contain these risks.

I suggest visiting the blog not only to read the post but because at the bottom there are links to other conversations online about these topics.

Comments

[Hamed Elbarki]

"invest in your community" Boy, where have those days gone??