I made a bunch of microloans through Prosper.com this time last year. Here’s my blog entry where I explain what it is. Let’s take a moment and see how they’re doing.

I started with 28 loans. A year later I’m down to 19. Of those 19, only 13 are still current (people are making their payments on time). The other 6 are 4+ months late. Of those six, 5 are in collections, one person is bankrupt.

Fine, I expected that there would be defaults. Nobody makes 26-28% loans and expects them to be paid in full. You build a portfolio and hope enough people stick it out to still bring in a decent return.

So here’s where I stand today.

I’ve made $123.29 net in the last 13 months, or $9.48 a month. Divide the initial total investment ($2,500) by the net cash ($123.29), and it’s a 4.9% return. Not all that shit hot, is it? And bear in mind, this doesn’t include the defaults from the 6 people that I know aren’t going to pay me.

The fortunate thing is, once those 6 people are gone, my remaining portfolio is MUCH healthier, with an average non-weighted portfolio interest rate of around 18%. If these remaining people stick it out for another two years, I should break even or post a small profit.

Was it worth it?

No.

It’s much less work to dump the money into a money market or conservative mutual fund. Other people on Prosper take pleasure in helping humanity with their debt consolidation or business capital… I’m in it solely for the money.

Live and learn.