You could also have a structure like Prosper.com and Lendingclub.com, and the investor only invests a small amount in each loan. That way the minority that default don't stop you from making a profit over all. Banks figured that out long ago that most people pay their debts back. Therefore, you invest in multiple loans at a high enough rate, and that high enough rate makes up for the defaults.
That's why it'd be best to issue collateralized loans.
In my view, any p2p loan should only be given when it's over-collateralized.
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You could also have a structure like Prosper.com and Lendingclub.com, and the investor only invests a small amount in each loan. That way the minority that default don't stop you from making a profit over all. Banks figured that out long ago that most people pay their debts back. Therefore, you invest in multiple loans at a high enough rate, and that high enough rate makes up for the defaults.