Prosper Releases Market Survey Results for March 2008

March 2008 Prosper People-to-People Lending Market Survey

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

As we have previously reported, Prosper's mix of "well priced" loans—loans with an attractive risk-return tradeoff—has dramatically changed from the same period last year with approximately a 200% increase in the percentage of "well priced" loans and a six-fold decrease in "low priced" loans—loans with an unattractive risk-return tradeoff. Part of this positive trend is attributable to the introduction of portfolio plans and performance guidance from the Prosper Marketplace—changes introduced last October. These changes continue to drive better overall performance of the market.

In March we saw further evidence of this with portfolio plan performance improving. For example, the Conservative portfolio plan—one of four model portfolio plans Prosper has provided as templates that can be used by lenders—consists of five credit slices. Looking at all the credit slices across all four plans, 18 of 21 slices improved or remained constant. This is quite positive considering the continuing credit crunch occurring in so many traditional financial markets and should lead to both better rates for borrowers and better performance for lenders.

We are also seeing a healthy start of custom portfolio plans, which lenders can create from scratch or modify from an existing Prosper model plan. These plans can be easily shared with friends or family. In March, approximately 1,800 custom plans were created that spawned over 18,000 bids.

Percentage of Attractive Risk-Return Tradeoff Loans as a Percentage of All Loans

March 2008	March 2007
72%	21%

Mix of Funded Borrowers

	March 2008	March 2007	Year-to-Date 2008	Year-to-Date 2007	Since Inception
Prime	39%	29%	41%	27%	32%
Near Prime	56%	57%	54%	55%	55%
Sub Prime	5%	14%	5%	18%	14%

Membership and Loan Volume Statistics

	March 2008	March 2007	Year-to-Date 2008	Year-to-Date 2007	Since Inception
New Members	40,779	38,938	108,273	103,705	646,401
Funded Loans	$7.3 million	$8.0 million	$20.5 million	$19.6 million	$128.8 million
Average Loan Size	$6,536	$6,935	$6,659	$6,419	$6,316
Daily Average Number of Borrower Listings	2,287	1,848	2,197	1,821	1,628

Estimated Annual Return on Prosper Select Index

	March 2008
Prosper Select Index	8.57%
Prime Select Index	9.19%
Near Prime Select Index	8.02%
Sub Prime Select Index	7.62%

Average Borrower Rates on Prosper Select Loans

	March 2008	February 2008	March 2007	Year-to-Date 2008	Year-to-Date 2007	Since Inception
Prime Select Loans	9.86%	10.32%	10.38%	10.02%	9.64%	10.06%
Near Prime Select Loans	15.52%	17.10%	15.08%	16.31%	14.76%	16.16%
Sub Prime Select Loans	35.00%	N/A	21.85%	29.69%	21.5%	24.16%

Definitions

Portfolio Plans: A portfolio plan is an automatic bidding tool that enables lenders to create their own bidding strategies and have bids placed automatically on listings that match the lender's desired lending criteria. Prosper lenders can create portfolio plans consisting of multiple slices of credit attributes.

Since Inception: November 1, 2005 through March 31, 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 March 31, 2008.

2007 Year-to-Date: January 1, 2007 through March 31, 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).

N/A: Not available; no loans met these criteria.

Press Contact:
Tiffany Fox
Prosper Communications Director
(415) 593-5416
tiffany@prosper.com