How many lenders for sufficient diversification

If you're looking for more lenders to put money into, I can give you my details .

Re borrowers, just thinmk what will happen to your returns when one goes bad. Say you only lost 50% of one of 10, that is a 5% reduction due to bad luck, so >5 months interest. Personally I wouldn't like that, but if P2P is only a small amount of your portfolio you might be happy. For consistent monthly returns you need 250+ and preferably 400+.

The thread hasn't been updated in a while so I'm sure there's been a bit of change into which platforms are in favour (and a few new ones have launched) but you might want to look at p2pindependentforum.com/thread/3382/diversification-platforms-apple-pie

Edit - personally I'm firmly in the as many loans across as many platforms as possible camp - takes some effort/time to get invested but relatively easy to then keep things ticking over with the help of a spreadsheet. A bit of a pain when you run out of boxes on the tax return calc sheets but not really a big deal. I do think a lot depends on how much you're wanting to invest overall tho and your risk attitude towards that - needs to divide into large enough minimum chunks in each platform to be worth the effort, and you need to be comfortable with the max overall amount in any single platform (just in case they fail). When you know what your comfortable min/max per platform is (and you may not yet) that'll likely work out your end target number. Actually on that basis I currently have too many platforms (as there are some below my ideal minimum, but they're also min effort so easy to leave ticking over), but there's very few I actually really REALLY want to get out of at the moment. 

Academic rambling: Increasing the number of platforms you use will in fact, increase the probability that you get "hit", but it should reduce the impact (loss) if you do.  There is definitely a balance (for me, anyway).  As you increase your diversification, your expected returns will tend to the average for the p2p marketplace.

Another random thought: "getting ahead" (i.e. above-average returns) requires you to do something different.

Here endeth the thought for the day.

I'm happy with just investing in 2 or 3 platforms that are strong and I can research and monitor thoroughly, rather than say 10, where I have to invest in platforms that are loss making, have bad software, lack economies of scale etc.
100 loans should be enough diversity, personally i'm happy with 50 loans that are liked by me, rather than several hundred that would mean scrapping the barrel, just for diversity.

If you were asking this of equity, then the figure is roughly 30 to 35 at which point you are basically fully diversed. FC recommends 100.

In reality, of course, how do you count independant borrowers, company A may well be related to company B operating from two different portals.  What I do is divide total sum by 100.  This then is my maximum loan value, often less.  The down side of this is that I still have two borrowers who have manged to suck up 3% each of my money which could support ~33 borrowers, see first paragraph.

Terminology.  OP you said "how many lenders" should you put your money into, but I regard myself as the lender, so should we assume you mean how many platforms or how many borrowers?

Personally, I don't think there are enough platforms (that I want to use, that do the sort of loans I'm interested in) to do much to mitigate risk; I have toe-dipped in several but in the main I use four, and nearly half my lending is through one platform though I am trying to balance it out. How much platform risk is there? Some, certainly, but all platforms have to have a run-down plan with a third party so a platform closing tomorrow does not represent a total loss of investment; it would certainly represent a loss of liquidity and I suspect there would be some financial losses.

As to loan diversity, I work on between fifty and a hundred loans; any more is too difficult to keep track of. (I don't like black box lending and I don't want to end up working like that whilst choosing the loans I'm in.) Expanding on what kermie said, the more loans you are in the closer you get to tracking the average loan failure rate. Fine if that's what you want to do. I rightly or wrongly like to choose my loans; I've had a three year learning curve and like to think I can avoid some of the dogs I went into in my earlier innocence.

I got hit on a platform when I had 3% in 1 loan, that I thought had great security.  The loan defaulted and the security has evaporated, hence a hefty loss.  Lesson learned, diversify and don't get involved with companies/sectors/security, that I don't understand!