I’m working on a new chart, lender demand. The way I determine lender demand is by the average days it takes for loans to fund. I have drawn the conclusion that lower funding time indicates higher lender demand. The lender demand is driven by one of two factors:
- More lenders on the platform – More lenders competing for the same number of loans
- Fewer borrowers – Fewer loans for the same number of investors
I believe interest rate is a byproduct of these two factors – not the driving factor.
Since my growth charts show strong growth and the lender demand appears to hover around 8.3 we can conclude Lending Club is keeping pace with lender and borrower demand. This is great news because it means we can continue to expect a strong need for lender capital. I believe this conclusion can also be supported by Lending Club’s very stable average interest rate.
There are two years of data that I have presented in the chart. I may tweak this when I finally deploy the new chart to production. I’ve included the 200 day moving average and 50 day moving average in 2 week intervals. The inflection points convey a rich amount of information. I hope you find this chart useful.
Side Note: I tried to create this chart for Prosper.com as well. However all the funding times came back around 1 – 2 days. I do not believe this is correct. I am using their origination date and creation date to find the funding time. If this is incorrect please contact me. I would be thrilled to have Prosper’s chart here too.