The team at Prosper recently shared their performance data from the Prosper Portfolio for May 2022.
Highlights from the Prosper Performance Update – May 2022 are as follows:
- In May, approximately 58% of loan originations “were rated AA- B, remaining stable month-over-month.”
- Average loan size in May “decreased by approximately 3.7% month-over-month.”
- The median monthly payment on Prosper loan to Income (PTI) ratio for May “decreased month-over-month to 4.98%.”
- The weighted average borrower rate for May originations “remained stable month-over-month.”
Portfolio insights and key charts may be accessed here.
The Prosper Performance Updates are designed to help the platform’s investor community “better understand performance trends and provide important insights into the trends [Prosper] are seeing and the information needed to invest through the Prosper platform.”
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Prosper’s latest investor update highlights the performance of standard product loans “originated through the Prosper platform.”
Delinquencies for the latest origination vintages (2021Q1 – Q3) “remain significantly lower than pre-pandemic vintages used to set credit performance benchmarks, reflecting Prosper’s disciplined and long-term approach to risk management.”
The platform’s strong credit performance is “enabled by innovative risk strategies combined with machine learning models that leverage proprietary data from over one million borrowers across the Prosper platform, along with data from credit bureaus and alternative sources.”
Current Macro Economic Environment
Though persistently high inflation and Fed policy “remain a significant headwind in 2022 amid supply chain disruptions, labor shortages, geopolitical conflicts, and the emergence of new COVID-19 variants, [Prosper] believes the financial health of most US consumers remains resilient.”
Multiple Fed rate increases “are expected in the coming months to combat inflation.”
However, these rate increases are also “expected to drive credit card balance growth and slow credit card payment rates, boosting personal loan demand.”
Tailwinds supporting consumers’ ability-to-pay “include robust wage growth, record household wealth, and low unemployment rates.”
Therefore, although credit normalization is occurring across nearly all risk segments, the platform’s management expects “the performance of prime consumer segments, which comprise most of the standard product loans originated through Prosper’s platform, to remain healthy.”
For more details on this update check here.