I don't really know a ton about this vehicle but from reading this thread it seems like the only way for this to be significantly profitable would be a sizeable chunk of capital split into <$50 or so loans. The risk of any single debtor defaulting is high but overall the majority should still repay you (this is the same concept behind large numbers of junk mortgages being bundled into derivatives that collectively had significantly higher risk ratings than any of the underlying assets did on their own). Problem is that you're now spending all your time on these websites going through $25 loan requests.
I got my Magnum condoms, I got my wad of hundreds, I'm ready to plow!