P2P Lending: Can Web 2.0 + Regulations Yield a Viable Market?

Analyst: Bill Bradway

January 26, 2009

Internet platforms that offer person-to-person (P2P) lending burst onto the scene in 2005 in the UK, followed by similar startup initiatives in the US led by Prosper. By January 2009, a total of nine startups had launched offerings of one kind or another in the US. The latest launch on January 22, 2009 from Pertuity Direct crystallizes the challenge of meeting US SEC regulatory requirements while engaging a Web 2.0 approach to delivery and fulfillment for unsecured consumer loans.

• Is this market niche (started by P2P lending) a viable opportunity for these lending platforms?
• How many borrowers will seek out loans through these platforms?
• Will there be a matching supply of investors to fund the loan demand?
• Will approach that meets SEC requirements succeed, fail, or, only serve a small, but marginal, niche market?
• How many of these P2P lending platforms can be successful?

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