David Lê, ThinkViet

The Prosper Group

To start a traditional Vietnamese “sở hụi” (Hụi group), several people gather together, each contributing an equal amount of money, thus creating a pot of cash that one member of the group can borrow. Similarly, groups are the heart of the Prosper marketplace. A group is organized by a single leader, can be large or small, and brings together borrowers who share a common interest, such as a nationality, or a professional, artistic, educational, or religious background. Prosper groups may consist of nail salon or restaurant owners, electronics workers, stay-at-home moms, university alumni, etc. In a Vietnamese Hui group, money can only come from the members of the Hui group, whereas in a Prosper group funds available for lending can come from both inside and outside the Prosper group.

Why join a group?

In Prosper, the main reason for borrowers to join a group is because they may get better interest rates for their loans compared to individual borrowers. Lenders, when considering making loans, will have greater confidence in borrowers who belong to a group with a good reputation. For example, the group you join may have a history of consistent, on-time loan payments from their current members. When lenders consider your loan listing, that confidence will typically result in a lower interest rate for your loan and thus lower monthly payments for you when the loan is funded.

As a borrower, you still individually request your loan and are solely responsible for its payment. But your performance as a borrower will effect your group. Groups with good repayment performance by its members will gain better reputation and confidence with lenders. Also, a group leader whose members successfully repay their loans earns more group leader rewards.

What should a borrower look for in a group?

You may receive an invitation to join a Prosper group, or you may have to look for one on your own. Browse through the various categories of groups already created in the Prosper marketplace. Look for groups with which you share a common interest. Additionally, look for a good member payment record. Pay attention to the group leader’s description, and to the group’s profile, so that you can see what else the group offers. It’s good to join a group where you can get moral as well as professional support, for example, in addition to the financial benefit of getting a lower interest loan.

What is a group leader?

If you don’t find a group you like, you can become a group leader, and create a new Prosper group based on any criteria you may choose. However you will not be able to borrow money as a member of your own group. You will have to join another group to borrow money, or do so individually. This is because group leaders earn rewards for the performance of their group members, and there would be a conflict if you act as a borrower from within your own group.

Now go to the page Becoming A Lender, and we’ll tell you about another exciting part of of “Play Hui On The Net”, how to LEND money and make great returns on your investment! Or you can actually join one of several Vietnamese groups already set up on Prosper (www.prosper.com), among them the new ThinkViet group.

David Le is in charge of marketing and public relations at ThinkViet. He can be reached at david@thinkviet.net.