At Bondora we present our recovery data monthly to bring you the most up-to-date information for p2p loan recoveries. Remember, recovery figures change over time as payments are brought in to loans in corresponding years.
Consistent Recoveries to Date
Recovery rates for Bondora loans remained relatively stable as compared to last month across all years, with less than 1% variance across the board.
It is important to note; newer loans are likely to have a lower recovery rate for two reasons: they have yet to go through the entire 3-step collection process, or they are so new that they have just started generating cash flows and missed payments are not yet a concern.
Recovery by Country
Spanish recovery rates are quite high for 2018, although it should be noted the total loan originations in the country is much smaller when compared to other data. Meanwhile, recoveries in Finland have maintained a stable rate within a 5% variance since 2014.
Finnish recoveries have been the most consistent overall, ranging from 39.86% in 2015 to as high as 46.39% in 2014. Loan recovery in Estonia was consistent, not moving more than 1% in either direction when compared to last month except for loans originating this year, where the recovery rate jumped to 58.04%, up more than 1.5%.
The highest recovery rate was at 76.57% in Estonia in 2014, while the lowest recovery rate in active countries where Bondora is currently lending was from Spanish loans in 2014 at 20.71%.
The Recovery Process
Bondora’s 3-step recovery process has been implemented to ensure high rates of recovery on missed payments. We utilize in-house collection along with court and bailiff methods to obtain any missed payments owed to our investors.
Learn more about our 3-step collection process for recoveries here and receive more detailed information about how Bondora secures missed loan payments for investors.
Recovery Performance – Count
In total, there were 3,044 more loan payment recoveries in November as compared to October. The number of recoveries in the default and court process was almost unchanged, as were recoveries in rare cases. Bailiff recoveries saw the largest increase to 8,296 from 6,089 a month prior.
The recovery count in Finland jumped to 6,872 on the month, likely as a result of an increase in loan originations in lower rating categories over the past several years. Spanish recoveries are still high as compared to their loan origination totals, as Spain has more recoveries than Finland (7,778), even as it originates significantly fewer loans. Loans in Spain have come with significantly higher risk, with almost all loans rated F or HR over the past few years. Therefore, this amount of loan recoveries is not unexpected.
Overall, Bondora cash recoveries were up 36% this month compared to October, for a total of €396,909. The majority of this jump in recoveries came with help from the bailiff who worked to retrieve payment from borrower’s themselves. Bailiff recoveries were up from €156,690 last month to €237,939 this month, a rise of 52%.
Default and court recoveries were up 20% from the previous month to a total of €151,280. The biggest increase came at the very first stage of the recovery process, where Bondora has filed a claim with the local court. Another sizable increase to note was recoveries being handled by a debt collection agency, which obtained 61,141 in recoveries on the month, up by close to 17% from last month.
Recoveries in rare cases were almost the same as last month, with more funds recovered from the bankruptcy process and less from debt restructuring.
A Note on Recoveries
Over the past several months there has been a steady trend of recovery increases, both in euro amount and total count. The positive aspect of more loan recoveries is that Bondora is getting better at securing missed loan payments from borrowers, displaying our ability to maintain income streams for our investors.
There will always be a need for a strong payment recovery process for p2p loans. Missed payments can be a scary thing for investors, which is why we at Bondora ensure we do everything in our power to recover any missed payments owed to our investors. With this in mind, it’s important to remember defaults and risk are two completely different things – but we’ll cover this more detail on another post.