Prosper referral program

Since June runs a referral program that allows Prosper members to refer new lenders or borrowers.

How does it work?

Prosper members are encouraged to put up text links, buttons or banners on their websites that advertise for Prosper. If someone clicks on that link, a tracking parameter included in the link format allows Prosper to detect which Prosper member refered the surfer. Should the surfer sign up the member who referred him will earn:

  • in case of a new borrower: 0.5% of the loan amount (up to $125) when the first monthly payment clears
  • in case of a new lender: $25 as soon as the first loan bidded on originates

Certain conditions apply – I won't go into the detailed rules here, Tom has already done a fine summary of the rules in his blog – just read it there.

Example: If you click on one of the following buttons and sign up as a new Prosper members I am eligable to earn the referral bonus if you get active:


Earn Great Returns. $25 Sign-Up Bonus. Borrow up to $25K. Rates as low as 7.00%.


Up to August 31st there is a huge incentive since new lenders that sign up through the referral program get credited $25 as well to their account.

Does it work?

Although I do not heavily use the Prosper referral links on and considering that most of the Wiseclerk audience are already Prosper users before they discover Wiseclerk, I did have several members sign up through my referral links in the past weeks. Every time somebody signs up through my link, I get an email with the new member's screenname. Most are still in the status 'Registered' meaning after signup they did not take any further steps yet to become a lender or borrower. One became or borrower, but so far failed to receive a loan.

More interesting ways to use referrer links

Wondering how the referral links can be turned from pure ads to a widget that offers additional information and is spread through viral marketing methods. Kevin at has created a tool that creates code for borrowers to promote their listing on MySpace or other webpages. The tool creates an ad for the borrower listing, showing the title, the photo, the interest rate and the percentage funded. It calls for action through a 'Bid Now' button. Cleary of interest to borrowers. And Kevin profits, since he incorporated his referral links. Therefore should somebody wishing to bid sign up as a lender, he can profit.

The Prosper referral program compared to the referral programs of other p2p lending services

British Zopa pays members 30 pounds for refering an active lender or borrower. This scheme exists since summer 2006 and occassionaly the bonus was increased to 50 pounds for a limited time.
German pays members 25 Euro for referring an active lender or borrower.
Dutch awards points for sucessful referral of lenders. These can be exchanged for merchandise, e.g. for 3 referred lenders a member can earn an iPod.
As far as I am aware of Lendingclub does not (yet) have an referral program. (Correct me if necessary!).
It will be interesting to see if and what new entrants like and will offer for referring new users.

The next step for even more growth

Currently all referral programs mentioned above have one thing in common. They are open only to existing members of the p2p lending services. Assuming they are successful and the p2p lending serves are seeking opportunities to enable even faster growth then the next step could be to start an affiliate program through networks like Zanox, CJ or Affilinet.

This would allow (semi-)professional internet marketeers to promote the offers. This step would offer two advantages:

  • Huge exposure of the ads on many websites. Experienced marketeers promoting the offers (still on pay for performance base – no untargeted advertising spendings)
  • Simply by beeing listed many people will sign up for themselves instead of marketing the offer to others.

The only downside are the costs which are typically 30 percent of transaction value. In case of Prosper seeking lender referrals this would add up to $32.5 (25 for the marketeer plus $7.5 for the affiliate network).

Lenders united!

PIVN Netherlands 

In the Netherlands lenders have formed the 'Peer-to-peer Investeeders Vereiniging Nederland', which is an association of lenders of peer-to-peer loans.

The goals of the PIVN are:

  • periodic consultation with the p2p lending platforms
  • publishing information of interest to lenders
  • offering discussion forums
  • conducting comparisons between p2p lending services

At the moment is the only p2p lending service active in the Netherlands. PIVN states as one of it's goals to achieve lower fees for lenders (0.5% instead of the current 1%) at Boober.

Membership fee at PIVN is 5 Euro annually (approx. 6.50 US$). So far about 50 Boober lenders became members. 

Boober limits allowed investment sum

Dutch p2p lending service changed the rules last week. Lenders are now restricted to a maximum investment sum of 39000 Euro. Boober told users that this step confirms that Boober is a platform for individuals and not for professionals or companies. It is believed that this step was neccessary due to regulation.

German Smava has restricted lenders to a maximum of 25000 Euros since the start. This too, is a precaution, since under German regulation professional lending without a license is not allowed.

Interview: Globefunder to take p2p lending global

GlobefunderP2P-Banking interviewed Brian Mullally, Co-Founder and CEO of GlobeFunder Ventures Inc

P2P-Banking: What is GlobeFunder about? When will it launch?

GlobeFunderGlobeFunder is about borrowers saving money and lenders making money.  And we are about small loan services being widely available to every person on the planet.  GlobeFunder‘s leadership focus is as a scalable provider of loan funding where it is needed most, at market-driven interest rates, with the highest levels of service, integrity and efficiency, so that not one person seeking a microloan in today’s marketplace goes without access to capital.  GlobeFunder’s US marketplace launches in October 2007 and internationally in select markets in November 2007. 

In the United States, the small loan market (as demonstrated by the credit card and payday lending industries, a more than $800B market in the US) is a segment that GlobeFunder’s lending marketplace of lower interest rates for borrowers and profitable opportunities for lenders will be attractive.  Borrowers on GlobeFunder are US consumers, with initial target markets focused on women, college students and higher credit quality clients.  GlobeFunder’s lending marketplace can scale by lowering capital costs for consumers, improving efficiency and providing market-driven investment returns for lenders.

Internationally, individual small loan borrowers are persistently underserved in today’s global marketplace.  GlobeFunder’s relationship with their local small banks and microfinance institutions will be utilized as a source of new loan funding for these providers of small loans.  

GlobeFunder’s team is talented and experienced in financial services, technology, consulting, legal, sales and operations.  GlobeFunder is located in Kalamazoo, MI, (Fast Company 50!) and is owned by its investors and founding management team which includes Brian Mullally, Chief Executive Officer; Benjamin Decio, President; and John Schoolman, Chief Operations Officer. 

P2P-Banking: What are the differences/advantages when compared to Kiva?

GlobeFunder:  Our for-profit, scalable marketplace where borrowers save money and lenders make money.  And where MFIs can access direct capital from lenders to grow their loan portfolios.  There needs to be more change in the small loan industry to make it a competitive marketplace for more people to get the loan funding they seek at rates that are the lowest cost possible.  Interest-free loans to MFIs don’t scale funding to drive enough lenders to a platform to make as much of an impact as can be done in a for-profit marketplace. 
The global microloan industry is still led by non-profit initiatives that over thirty-plus years have not provided the scale needed to meet global small loan demand according to GlobeFunder’s market validation as well as microfinance industry analysis and statistics.  Only by incentivizing MFIs, borrowers and lenders will there be sufficient capital in the system or at least try to keep up with 15-30% microloan growth rates.  Charitable loans are not enough, people need to be motivated by efficient interest-driven capital on both the borrower and lender side of transactions.  It makes for better business decisions and discipline. 
The rapid growth of the Internet in developing markets and new online financial transaction business models offer GlobeFunder’s opportunity to enter both the international and domestic markets as a disruptive player.  GlobeFunder’s creation of a new for-profit, global person-to-person loan system and a worldwide social network will command media and online marketing exposure as an innovative, unique product offering.

P2P-Banking: Do lenders earn interest?

GlobeFunder:  Yes they do and they will be incentivized by promotions and profits to keep lending more money too.

P2P-Banking: What initiated the idea to start a service like this?

GlobeFunder:  The high costs of small loans for borrowers which has constrained capital flows and kept funds from going to those who need it most, and using the internet to create connectivity and efficiencies that undercut the high margin earned by the credit card and retail debt industries, while at the same time helping everyday lenders make money was just too large an opportunity to pass up for our team. 

P2P-Banking: How large is the GlobeFunder team? You are currently looking for an EVP/Global Marketing Director?

GlobeFunder:  We have a large team across the globe given our leading loan origination, servicing and technology team partners.  Our local office team consists of four people with four more team additions coming soon including a talented marketing professional.  We are always looking for great people so let us know if you are interested.  Email:

P2P-Banking: GlobeFunder Ventures is a private owned corporation? How is it financing its operations? Can you please describe your business model?

GlobeFunder: GlobeFunder is a privately held corporation owned by investors and our management team.  Our company earns fees in three ways:  lender servicing fees, borrower transaction fees and interest income on funds flowing through our system. 

P2P-Banking: The website currently only shows one Microfinance Institution (MFI) GlobeFunder is working with. Are you planning to connect with more MFIs?

GlobeFunder:  This website is to be entirely replaced and relaunched with our enterprise platform and network in September 2007.  We have connected with more than forty MFIs to date, and we will launch our services in a few targeted country markets this fall to drive loan funding to these MFIs from lenders interested in helping while also earning a return on their investment.

P2P-Banking: Where do you see GlobeFunder heading in the next 6 months?  The next 2 years?

GlobeFunder:   GlobeFunder over the next six months will be operating in three countries, including the US.   We target global small loan volume that is significant to make an impact in today’s marketplace where funds are scarce and players need to get motivated and moving forward in new innovative ways.  In two years we will be operating in a dozen countries. 

P2P-Banking: What is the greatest challenge to your success?

GlobeFunder:  Adding great team members fast enough.

P2P-Banking: What is the one thing you need to get to the next phase of  development?

GlobeFunder:  A world class team.  

P2P-Banking: What sites do you visit everyday other than your own?

GlobeFunder:  Wall Street Journal, Yahoo Finance, P2P Banking and my alma mater home pages (Georgetown (HoyaSaxa!!! and Notre Dame (GO IRISH).

Thank you for the interview.

Communication approaches of P2P lending services

Today I will take a look at the communication approaches of Prosper, Lendingclub, Zopa and Smava. Since it is hard to judge the individual customer support these companies offer, the focus of this post is on the mass communication channels. To communicate their services to the lenders and borrowers the services can use the website's FAQ/tutorials, a forum, blog(s) and newsletter(s).
Prosper has very detailed FAQs, which leave no aspect open. There are tutorials, videos and webinars. The Prosper forums are very active. While Prosper announce changes to the service in detail (here), the policy usually seems not to comment on individual users questions (except for the bug report section). Prosper seems to rely on users to communicate and educate each other in the forums. There has been criticism about censorship and deleted posts in the forums which led some users to set up an prosper independent forum.
As far as I can tell Prosper has no blog of its own, but there is a personal blog of the CTO John Witchel. But it is not very active and will probably not be found by the average Prosper user.

The Zopa FAQs are detailed, too. The Zopa Forum is quite active with Zopa staff members responding to posts and questions. Zopa has a company blog which has a leisurely tone and often is offtopic. In my opinion it could get more informative for lenders or borrowers.
The same applies to the newsletters Zopa sends out.

Smava maintains a very detailed and good FAQ. The Smava forum is pretty quite, but Smava staff usually is responsive to user questions. There is no blog. Smava is only 3 month old and so far there have been only 2 or 3 newsletters, which were mainly a summary of developments.

Lendingclub communicates very different from the others. Mainly it relies on it's blog which is in fact directly on the homepage. The blog is very active with up to 2 or 3 posts per day. Not only does it explain details of the lendingclub service but also has general advice on personal finance, e.g. on obtaining and maintaining good credit. Lendingclub has lots of guest authors contributing to the blog. The FAQ are somewhat hidden and only available to logged in users (unless you know the direct link). The information, when located, is detailed (e.g. states). As far as I am aware there is no Lendingclub forum.

My impression is that Prosper and Smava communicate in a style that appears more corporate and 'old fashioned' always pondering what information can be released and what for. Prosper has occasionaly received rather aggresive feedback of users, citing them of being non-responsive to the wishes of their users.  Zopa has a more buddying tone – hey take it easy. Lendingclub sounds educational to borrowers, aiming to help them by supplying them information. On the other hand Lendingclub's approach seems a little marketing driven, because their approach gains them search engine and blog visibility.