Occupations with lowest defaults

Prosper.com noted in it's September lending market survey that the occupations with the lowest defaults on Prosper are:

    1)   Computer Programmer  0.96%
    2)   Civil Service  1.48%
    3)   Analyst  1.63%
    4)   Mechanical Engineer  1.67%
    5)   Electrical Engineer  1.85%

Lowest default rates by state are:

    1)   Minnesota  0.00%
    2)   Ohio  0.65%
    3)   New Jersey  0.99%
    4)   Colorado  1.40%
    5)   New York  1.56%

Of these only for New Jersey and New York there is a obvious explanation – the average interest rates for loans in these states are low due to the state lending limits. This means in these states more loans with good credit grades were founded – reducing the risk.

Kiva refines risk assessment

Social lending service Kiva has refined its risk assessment for participating MRIs (microfinance institutions). The changes and the mechanism are described here. Risks for Kiva lenders include Entrepreneur Risk, Fieldpartner Risk and County Risk. 

So far the default rate for Kiva has been 0.17% on a loan volume of $9.965.000 (4.4% of loans are one month late). When compared to Prosper.com default rates, that is an extremly good result. So far the MRI on Kiva with the worst performance is REDC Bulgaria, followed by an MRI that organizes loans to people in Uganda, Kenya and Tanzania.

Another interesting figure: The average time a listing is online at Kiva.org until it is fully funded is 1.24 days.

So far all my Kiva loans are repaying on schedule.

Prosper loan figures

Prosper loans have meanwhile surpassed 66 million dollars loan volume. A look at wiseclerk's prosper loan aging table shows that Prosper.com succeeds in increasing originating loan volume nearly every month. Currently new loans for about 8 million US$ originate each month.

However the figures also show an alarmingly high volume for late and defaulted loans. Especially when looking at older loans (the new ones do not have aged enough to be technically able to default). For example of 2.1 million dollar loan value that originated in June last year, $177,000 loan value has defaulted and another $105,000 are 3 or more months late. The default rate for loans from June 2006 will therefore be well above 10 percent at the end of the 36 month term. And this is no execption. For March and April 2006 defaults are already higher than 10 percent of originating loan value.

prosper loan aging

Dzogchen view on good groups

Dzogchen analyses in this thread which Prosper groups have grown fast and larger. He uses own categories like 'distressed borrowers' to analyse group performance and found out that groups directed at some causes have experienced much higher defaults then others. E.g. in 'distressed borrowers' 12.1% are delinquent, while in 'entrepreneurs' it's 6.2% compared to 0.5 in 'computer users. techies'.

Following discussion included whether this allows predictions and if listings without groups are better risks. An asked for report was if borrowers that posted in the 'Review My Listing' did have a higher rate of defaults.