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Adopt and Prosper?

An article in today’s Wall Street Journal about online lending reports that Zopa, a British person-to-person lending market, is starting operations in the U.S. It will join, among others,, which the WSJ reports will issue $100 million in person-to-person loans this year, with future loan originations projected to be $1 billion in 2010 and $9 billion in 2017. Can you imagine: $9 billion in person-to-person, unsecured loans? That should certainly shake up the credit markets.

I love cruising the loan offers at There is a lot of information attached to each offer, and I’d imagine you could learn quite a bit about human behavior, decision making, and biases by playing with their data. I wonder if any economists are already working with the Prosper data (think “What Makes You Click,” the online-dating paper); I am looking forward to learning more about Prosper first-hand in a couple of months.

Even a quick glance at Prosper loans seems to show that lenders leap to loan money to people with a “good” cause — expanding a family business, e.g. — as opposed to simply consolidating credit card debt. A lot of the loan offers are great reading, too.

I found this listing particularly interesting: a couple who is trying to adopt their second child, the first one from China and the second one from Guatemala; meanwhile, the husband recently had a heart attack and their grown daughter “got shot in the face at work in September.” (Note to reality TV producers: maybe you guys should be cruising the Prosper site, for show ideas.)

What I found most interesting was this link to the family’s budget. It shows that their two adopted sons will provide more than $1,200 in monthly income:

Because my husband is retired, his dependents also get a Social Security Check. Because he did not go with me to China, we have to readopt our China son for this to start therefore it won’t start until Jan or Feb, but he is going with me to Guatemala.

I didn’t know that you could add dependents like that under Social Security provisions. The couple is hardly going to get rich by having two adopted sons, but the cash certainly changes the incentive of older couples to adopt, whether from the U.S. or beyond.

As the market for person-to-person lending continues to expand, I look forward to reading more such tales via Prosper, Zopa, and all the rest.