Fascinating concept, fascinating website

www.prosper.com
Leader in online peer2peer lending. I discovered this website a few months ago and I am now a lender/user.
People borrow money and prosper is the "middleman" that brings the lender and the borrower together on the prosper platform/website.
Prosper borrowers ask for a loan, lenders then have to bid for the loan. Most loans don't get fully funded so the loan is then cancelled. When the loan is fully funded, borrowers get a return that depends on the borrozers capability in paying off that loan. Borrowers can get cheaper rates then a bank would offer them.

Caution is advised because these loans are not backed by any security. Prosper does check identity and credit scores.

I find it an excellent diversifation in an investment portfolio. Consumer credit/lending is pretty unrelated to interest rates, stock markets, bond markets, gold and other asset classes.

Prosper is a very young website but I believe in the potential of peer2peer lending. I think it will become the ebay of P2P lending. If it will IPO, I will definitely buy a long term stake in the company.