3rd Slow Month for the Secondary Market

Market & Pricing

The Secondary Market entered its 3rd month of declines in transactions, as activity fell further to €152,547 in February. This is a 31.7% drop from January. The most significant decline was with Portfolio Manager activity. Let’s take a more detailed look:

3rd slow month for the Secondary Market.
3rd slow month for the Secondary Market.

This isn’t the first month Portfolio Manager has declined. It’s been diving since December, falling further by 53.7%. Manual transactions also fell by 20.4%, slightly less than January’s 24.2%. Last month, API transactions increased by 25.5%, but they fell by 43.5% this month. One thing that remains constant is that Manual transactions have the majority share of transactions—63.2%. This totals €96,359 in transactions.

Secondary Mark total volume – February 2022
Secondary Mark total volume – February 2022

Current loans

Even though it declined from the previous month by 30%, it still has

the largest share of transactions, with a value of €122,675. Manual transactions still have the majority share (59.9%), followed by API transactions (33.9%). Portfolio Manager transactions make up the remaining 6.3%.

Even though transactions sold at a premium achieved the top spot in January, this month, transactions at a discount proved to be the most popular, making up 53.1% of all current loan transactions. Those sold at a premium decreased by 22.0%. Loans sold at par made up 38.3% of all transactions.

Secondary Market current loan transactions – February 2022
Secondary Market current loan transactions – February 2022

Overdue loans

February’s overdue loan transactions totaled €19,271, a 28.5% decrease from January. In this category, loans sold at a discount had the most significant decline—falling by 40.1%. Loans sold at a premium made up the largest portion, with a 35% share.

The API only accounted for 26.3% of all overdue loan transactions, with the remaining 73.7% coming from manual transactions. Manual transactions did, however, drop by 22.6%.

Secondary Market overdue loan transactions – February 2022
Secondary Market overdue loan transactions – February 2022

Defaulted loans

For the 2nd month in a row, defaulted loan transactions decreased this month by 56.3%. The transactions totaled €10,559. But, as was the case last month, sales at a discount remained the strongest category, making up 97.8% of all transactions. As you can see in the table below, transactions at par and a premium fell to their lowest levels in recent months.

Manual transactions had an 82.3% share, and API transactions’ share was 17.7%.

Secondary Market defaulted loan transactions – February 2022
Secondary Market defaulted loan transactions – February 2022

3rd month of declines for Secondary Market

February marked the 3rd month of decreases in Secondary Market transactions. As we’ve mentioned previously, this decline in activity signals investors’ preference for Go & Grow’s automated investments rather than the Secondary Market’s manual buying and selling approach. As more investors opt for the hands-free Go & Grow investment method, it’s natural to see a drop in manual buying and selling of loans on the Secondary Market. But, as the Secondary Market activity is known to go up and down, let’s see if the activity will pick up again.

Remember, investors should not seek higher returns from buying and selling loans on the Bondora secondary market.