Graduate students at the Media Lab often produce class projects that are relevant to the Center for Future Banking. These works are not published works, but can provide valuable and significant insight into some of the current research activities at the Center.
'Pattern Recognition and Analysis' was a course taught by Professor Rosalind Picard during the Fall 2008 semester. This course produced two class projects which have been selected for their relevance to Center.
Peer to peer lending (P2P lending), also known as person-to-person lending or social lending, is one of the most traditional ways to borrow money. Nowadays a more and more popular form of P2P lending has been through the Internet, where P2P lending appears in two primary variations: an "online marketplace" model and a "family and friend" model. Prosper.com provides a platform for online P2P lending that allows people not only to manage their loans between friends and family, but also to raise funds from random people, to form groups, and to construct new social networks during the lending process. In this report, a series of clustering and classification techniques were applied to analyze the effect of social capital on P2P lending. Furthermore, the social interaction behavior features were minded from the real life P2P lending data collected on Prosper.com. The analysis revealed the impact of social capital, in comparison to financial profile, on the classification of P2P loan funding successfulness, and also provided a possible guideline for borrowers to increase their chances to get a loan.
Prosper.com is an online platform for peer-to-peer lending. Borrowers create personal profiles and solicit loans via online listings detailing the amount requested, maximum interest rate, and purpose for the loan. In turn, lenders assess and can bid on listings; if the total dollar amount of bids is equal to the amount requested, the loan is funded. When total bid amount exceeds the amount requested, those lenders electing the lowest interest rates are granted a stake in the loan. If a listing fails to garner complete funding, it is canceled by the system and the borrower has the option to repost.
