April 2008 Market Survey

Prosper's People-to-People Lending Market Survey results are released the second Tuesday of every month. To register to automatically receive the survey, send an email with "SUBSCRIBE" in the subject line to: p2plendingmarketsurvey@prosper.com.

Market Commentary By Prosper Co-founder and Chief Executive Officer, Chris Larsen

In April, we saw the supply of loan listings with an attractive risk-return tradeoff hit an all time high and approximately double compared to the prior month. At the end of March, the supply of loan listings with an attractive risk-return tradeoff was approximately $5 million; and at the end of April the supply increased to approximately $11 million and has remained at that level into May.

This significant increase in the supply of loan listings with an attractive risk-return tradeoff is attributed to the fact that on April 15 we commenced our business arrangement with WebBank, a Utah-chartered industrial bank. Through our agreement, all loans originated through the Prosper marketplace resulting from listings posted on or after April 15, 2008 are made by WebBank under its bank charter. Prosper provides services to WebBank in connection with the origination of such loans and Prosper services loans made to Prosper borrowers on behalf of registered Prosper lenders who purchase such loans. In effect, this partnership opened the platform to more borrowers, who may have previously been constrained by low state rate caps.

Also in April, we saw the supply of prime borrower listings hit an all time high, accounting for nearly half of all loan listings in terms of dollars requested. Prime borrower originations also reached its record level of 43% of funded loans.

Currently, the significant increased supply of quality listings is providing more attractive bidding opportunities, which is making it easier for lenders to efficiently deploy more money onto the platform.

Mix of Funded Borrowers

	April 2008	April 2007	Year-to-Date 2008	Year-to-Date 2007	Since Inception
Prime	43%	30%	41%	28%	33%
Near Prime	51%	55%	53%	55%	54%
Sub Prime	6%	14%	5%	17%	13%

Membership and Loan Volume Statistics

	April 2008	April 2007	Year-to-Date 2008	Year-to-Date 2007	Since Inception
New Members	46,312	34,144	154,585	137,849	692,713
Funded Loans ($)	$8.5 million	$8.7 million	$28.9 million	$28.3 million	$137.3 million
Funded Loans (Units)	1,305	1,091	4,379	4,145	21,699
Average Loan Size	$6,486	$7,956	$6,607	$6,824	$6,326
Daily Average Number of Borrower Listings	2,744	2,001	2,333	1,866	1,665

Estimated Annual Return on Prosper Select Index

	April 2008
Prosper Select Index	8.84%
Prime Select Index	8.90%
Near Prime Select Index	8.65%
Sub Prime Select Index	11.56%

Average Borrower Rates on Prosper Select Loans

	April 2008	March 2008	April 2007	Year-to-Date 2008	Year-to-Date 2007	Since Inception
Prime Select Loans	9.82%	9.86%	10.44%	9.96%	9.88%	10.04%
Near Prime Select Loans	15.05%	15.52%	15.46%	15.91%	14.96%	16.04%
Sub Prime Select Loans	25.00%	35.00%	25.29%	28.88%	22.60%	24.17%

Definitions

Attractive Risk-Return Tradeoff: For purposes of this survey release, listings are considered to have attractive returns if, based on historical loan repayment performance of Prosper borrowers with similar characteristics, they are priced sufficiently to compensate lenders for risk. Risk includes both the risk of non-payment by the borrower and other risks associated with people-to-people lending. In general, as the credit quality of the borrower declines, the range of possible returns widens, requiring a larger risk premium to compensate the additional uncertainty. The amount of risk premium required to compensate for a given level of risk is a subjective judgment. The following formula is used by Prosper to determine if a listing is priced adequately to have an attractive risk adjusted return: Maximum Borrower Rate > Risk Free Rate¹ + 3.25% + (Expected Annual Default * 1.5) + Prosper Servicing Fee. All lenders should make there own judgments with respect to what constitutes an adequately priced listing.

¹Risk Free Rate = 2-year CD national rate on BankRate.

Since Inception: November 1, 2005 through April 30, 2008. Prosper's by invitation only "friends and family" launch began on November 1, 2005 and Prosper launched to the general public on February 13, 2006.

2008 Year-to-Date: January 1, 2008 through April 30, 2008.

2007 Year-to-Date: January 1, 2007 through April 30, 2007.

Prosper Select Index: The Prosper Select Index return is the estimated average annual return on invested principal, based on actual delinquency performance to date. The Prosper Select Index includes AA - E credit grade loans for borrowers whose credit reports at the time of application indicated zero current delinquencies, three or fewer credit inquiries, and a debt-to-income ratio of 40 percent or less. The annual return period reflects loans originated in the twelve month period ending one month prior to the observation date of January 31, 2008. Prime Select includes AA and A credit grade loans (credit scores of 720+). Near Prime Select includes B, C, D credit grade loans (credit scores between 600 and 719). Sub Prime Select includes E credit grade loans (credit scores between 560 and 599).

Average Borrower Rates: Average Borrower Rates are the weighted average borrower rates on Prosper Select Index loans with loan amounts between $5,000 and $10,000. Rates shown are interest rates, not annual percentage rates.

Mix of Funded Borrowers: Prime includes AA and A credit grade loans (credit scores of 720+). Near Prime includes B, C, D credit grade loans (credit scores between 600 and 719). Sub Prime includes E and HR credit grade loans (credit scores below 600).