An increase of 3.5% in the total amount recovered between 2014 – 2017

Welcome to our monthly blog post on the performance of recoveries. Below, we take a look at the percentage of principal and interest retrieved between 2014 – 2017.

Recovery rate - February 2018

Why is 2017 showing the lowest recovery rate?

On first glance, this may appear to show that the success of our recoveries process has slightly decreased since 2014. However, it is important to note that the latest year will almost always show the lowest recovery rate. Quite simply, this is because the loan is moving through our 3-step collection process and is not yet generating a cash flow or has only recently started generating a cash flow.

A total of €5,405,446.16 was recovered between 2014 – 2017, an increase of 3.5% since last month.

An increase of 14% in Estonia

recovery-rates-per-country-feb-2018

In 2017, the largest amount of cash recovered was in Estonia at a total amount of €349,071.75, an increase of 14% on the absolute amount since last month. However, the highest rate of recovery is still visible in Finland at 56% and a total of €290,156.15. It’s important to remember that these rates will change over the coming months, we explain why below.

Historically, recovery rates have always been the highest in Estonia. Take 2014 as an example, the rate for this period is 81% and a huge €813,724.60 recovered. Looking backwards from 2017, you can see the rate of recovery increase over each year in Estonia as more time is allowed for the cash flows to come in.

Why is this figure different to last month?

After a month or a year ends, investors still receive a cash flow from this time period when the loans were issued. For example, we may still receive a monthly cash flow from a loan that defaulted in 2014. Due to this, the data is consistently being collected and updated to reflect the changes.

What happens when a borrower stops making repayments?

Recently, we published our 3-step collection and recovery process which explains exactly what happens when a borrower misses their monthly loan repayment.

168% increase in cash recovered from rare cases

Welcome to our monthly blog post discussing the cash recovered in each stage of the collection process. We have tried to assign all recovery payments to a specific stage that was set closest to the payment date. While this approach is not always correct in the case where recovery stages are not promptly updated, it gives a very good overview of the drivers behind recoveries.

The total amount of cash recovered in December 2017 was €259,507.85. This is +17.99% compared to the previous month.

recoveries-cash-flow-jan-2018

Why is this important?

When looking at the table above, it shows how effective each stage of the process is at recovering cash owed to investors and can help you understand why some stages are more effective than others. If you haven’t already read our previous posts on the ‘3-step collection and recovery process’, November’s post and December’s post then we would recommend that you check them out first.

Why the significant increase in cash recovered from rare cases?

Very rarely, Bondora receives a notice about criminal proceedings related to a borrower. After an official notice is received from the authorities, the loan will be frozen until the police finish their investigation and the case is ready to be sent to court. In these types of cases, it is usually extremely unlikely that any funds will be recovered.

Other types of rare cases include bankruptcy and debt restructuring. The bankruptcy process is only initiated if the bailiff has not been able to collect the debt after freezing the borrower’s assets and accounts. Bondora either initiates this bankruptcy on its own or joins an existing bankruptcy filing. A distribution plan is then set up by the courts or bankruptcy registrar for the borrower’s assets and depending on the decision from the court, a new payment schedule is created for retrieving the principal. The court may also use debt restructuring to create a new payment plan for the debtor.

While the reasons for the increase in cash recovered from the related cases specifically cannot be shared, it can be for a variety of reasons including:

  • The courts have found assets or an alternative income source which were not previously known
  • In criminal investigations, the authorities may have located the person involved

Quite often, the rare cases mentioned above have very unique circumstances making it difficult to generalise the drivers behind sudden changes. Read more here about our identification and fraud detection process.

Why is the bailiff stage crucial in the recovery process?

Take a look at the bailiff stage in the table above, it’s visible that once the bailiff has the ability to freeze the borrower’s income and assets this makes a significant impact on the amount of cash recovered. Ultimately, we aim to proceed to this stage as quickly as possible in order to begin generating a cash flow for investors. In December, the amount of cash in the stage ‘The bailiff is working to retrieve payments owed from the borrower’s income and assets’ increased by approximately 73% in Finland alone.

What next?

Once all cases can automatically be filed to the courts, we expect the cash recovered in the bailiff stage to show the largest amounts across all countries. This is important because it means that we can start to generate a cash flow in a more time-efficient manner for investors.

The recovery process by stage, what is the current status?

Welcome to the third post in our monthly overview of the recovery stages. Here, we’ll show you exactly how many loans are in each stage of the recovery process and we will compare how it has changed from month to month.

While we have tried to assign all loans to a specific stage as of the date of the report, the recovery stages are sometimes not promptly updated so individual loans may occasionally fall under incorrect stages.

Where do the figures stand?

recovery by stage and count jan 2018

Why is this important?

In case you missed our previous post, you might firstly find it useful to check out our 3 step collection and recovery process. This explains everything you need to know about each stage and substage you see above. Soon, we aim to improve the view and reporting on your Bondora account so you can see all the information about what stage your loan is at in the recovery process along with a reminder of what happens at each stage.

Why are there a high number of Spanish cases waiting to be filed to court?

Looking at the table above, you can see an increase in the number of Spanish loans in the stage ‘We are preparing documents to file a payment order to the local court’, which is significantly higher than in other countries. As it stands, we are currently working with a specialist partner in Spain who will aid us in filing the remaining defaulted cases to court. A handful of these cases will be filed between January – February 2018, with the speed and frequency of this expected to increase on a weekly basis going forward.

It’s important to note that we do not change the status to ‘We have filed the claim and the local court has not yet reached a verdict on the payment order’ until we receive confirmation of the court case number for each defaulted borrower. With this in mind, the status of the defaulted loan may have actually progressed sooner than we update here.

Why is the bailiff stage important?

This is a critical step in the recovery process for a number of reasons, most importantly because the bailiff has the rights to freeze the debtor’s assets and accounts to cover the payments owed. Once successful, this stage is usually where a cash flow is generated and you will start to see payments come in to your Bondora account.

Check in again next month to see how January’s figures weigh up.

Average recovery rate for 2014-2017 is 46.3%

Welcome to our monthly blog post on the performance of recoveries. Below, we take a look at the percentage of principal and interest retrieved between 2014 – 2017.

Recovery rate 2018 jan

Why is 2017 showing the lowest recovery rate?

On first glance, this may appear to show that the success of our recoveries process has slightly decreased since 2014. However, it is important to note that the latest year will almost always show the lowest recovery rate. Quite simply, this is because the loan is moving through our 3-step collection process and is not yet generating a cash flow or has only recently started generating a cash flow.

A total of €5,221,943.85 was recovered between 2014 – 2017.

In 2017, the highest rate of recovery was in Finland at 54%

recovery rate-per-country-january-2018

In 2017, the largest amount of cash recovered was in Estonia at a total amount of €306,012. However, the highest rate of recovery was visible in Finland at 54% and a total of €254,997. It’s important to remember that these rates will change over the coming months, we explain why below.

Historically, recovery rates have always been the highest in Estonia. Take 2014 as an example, the rate for this period is 81% and a huge €810,054 recovered. Looking backwards from 2017, you can see the rate of recovery increase over each year in Estonia as more time is allowed for the cash flows to come in.

Why is this figure different to last month?

After a month or a year ends, investors still receive a cash flow from this time period from the loans issued. For example, we may still receive a monthly cash flow from a loan that defaulted in 2014. Due to this, the data is consistently being collected and updated to reflect the changes.

What happens when a borrower stops making repayments?

Recently, we published our 3-step collection and recovery process which explains exactly what happens when a borrower misses their monthly loan repayment.

15% increase in cash recovered at the bailiff stage in Finland

Welcome to our monthly blog post discussing the cash recovered in each stage of the collection process. We have tried to assign all recovery payments to a specific stage that was set closest to the payment date. While this approach is not always correct in the case where recovery stages are not promptly updated, it gives a very good overview of the drivers behind recoveries.

cash-flow-recoveries-in-november-2017

* Data valid for the period 01/11/2017 – 30/11/2017

Why is this important?

When looking at the table above, it shows how effective each stage of the process is at recovering cash owed to investors and can help you understand why some stages are more effective than others. If you haven’t already read our previous posts on the ‘3-step collection and recovery process’ and ‘A snapshot of the recovery process stages, where do the numbers currently stand?’, then we would recommend that you check them out first.

Changes since last month

Whilst the total amount of recoveries across the board are lower than in October, the distribution over different stages of the process are relatively similar. In Finland, even though the total amount recovered was over 15% less than the previous month, the total amount of recoveries at the bailiff stage has increased by approximately 15% at €48,899.

Why is the bailiff stage crucial in the recovery process?

Take a look at the bailiff stage in the table above, it’s visible that once the bailiff has the ability to freeze the borrower’s income and assets this makes a significant impact on the amount of cash recovered. Ultimately, we aim to proceed to this stage as quickly as possible in order to begin generating a cash flow for investors.

What next?

Once all cases can automatically be filed to the courts, we expect the cash recovered in the bailiff stage, as well as in the fourth sub stage of the Default & Court stage, to show the largest amounts across all countries. This is important because it means that we can start to generate a cash flow in a more time-efficient manner for investors.

Defaults waiting to be filed to court in Estonia decreases by over two thirds

This is the second post in our monthly overview of the recovery stages. Here, we’ll show you exactly how many loans are in each stage of the recovery process and we will compare how it has changed from month to month.

While we have tried to assign all loans to a specific stage as of the date of the report, the recovery stages are sometimes not promptly updated so individual loans may occasionally fall under incorrect stages.

Where do the figures stand?

recoveries by stage and count

* Data as of 30.11.2017

Why is this important?

In case you missed our previous post, you might firstly find it useful to check out our 3 step collection and recovery process. This explains everything you need to know about each stage and substage you see above. Soon, we aim to improve the view and reporting on your Bondora account so you can see all the information about what stage your loan is at in the recovery process along with a reminder of what happens at each stage.

Uplift in Estonian cases filed

Last month, we discussed why Estonia and Spain have more cases waiting to be filed to court than in Finland. We explained that thanks to the access to technology and cooperation with the local courts, we have been able to automatically file cases in Finland with more speed and efficiency than other countries. We aim to reach this same efficiency in all locales.

Recently, we have made a similar improvement and filed a large number of cases in Estonia. Last month, there were 2,300 cases in Estonia waiting to be filed via a payment order to the local courts, in November this figure stands significantly less at 726. What’s more, there are currently 2077 claims filed to the local courts in Estonia that are awaiting a verdict, a huge increase on last month’s figure of only 280.

Why is the bailiff stage important?

This is a critical step in the recovery process for a number of reasons, most importantly because the bailiff has the rights to freeze the debtor’s assets and accounts to cover the payments owed. Once successful, this stage is usually where a cash flow is generated and you will start to see payments come in to your Bondora account.

Check in again next month to see how December’s figures weigh up.

Average recovery rate for 2014 – 2017 is 46.8%

Welcome to our monthly blog post on the performance of recoveries. Below, we take a look at the percentage of principal and interest retrieved between 2014 – 2017.

Recovery rate for December 2017

Why is 2017 showing the lowest recovery rate?

On first glance, this may appear to show that the success of our recoveries process has slightly decreased since 2014. However, it is important to note that the latest year will almost always show the lowest recovery rate. Quite simply, this is because the loan is moving through our 3-step collection process and is not yet generating a cash flow or has only recently started generating a cash flow.

A total of €4,971,943.9 has been recovered between 2014 – 2017.

What happens when a borrower stops making repayments?

Recently, we published our our 3-step collection and recovery process which explains exactly what happens when a borrower misses their monthly loan repayment.

How much cash is recovered in each stage of the process?

Welcome to our monthly blog post on the cash recovered in each stage of the collection process. We have tried to assign all recovery payments to a specific stage that was set closest to the payment date. Whilst this approach is not always correct in the case where recovery stages are not promptly updated, it gives a very good overview of the drivers behind recovery.

recovery-by-cash-flow-nov-2017

*Data for period from 1/10/2017 to 31/10/2017

Why is this important?

When looking at the table above, it shows how effective each stage of the process is at recovering cash owed to investors and can help you understand why some stages are more effective than others. If you haven’t already read our previous posts on the ‘3-step collection and recovery process’ and ‘A snapshot of the recovery process stages, where do the numbers currently stand?’, then we would recommend that you check them out first.

Why does the table show the largest amount of cash recovered in Estonia in the ‘Default & Court’ stage?

First three sub stages show more cash recovered in Estonia than Spain, Finland and Slovakia mostly because the total amount of loans in Estonia is higher than in Finland and Slovakia. However, this is also because of the success of the DCA’s in Estonia. In the future, we plan to have all cases automatically filed with the courts to improve the speed of the overall recoveries. In case the DCA’s are already working on a case and are delivering value we will continue to work with them. As it stands, only cases in Finland are automatically filed with the courts and this is why it shows the largest amount of cash recovered for Finnish loans at the bailiff stage.

Why is the bailiff stage crucial in the recovery process?

If you direct your attention the bailiff stage, it’s visible that once the bailiff has the ability to freeze the borrower’s income and assets this makes a significant impact on the amount of cash recovered. Ultimately, we aim to proceed to this stage as quickly as possible in order to begin generating a cash flow for investors.

What next?

Once all cases can automatically be filed to the courts, we expect the cash recovered in the bailiff stage, as well as in the third sub stage of Default & Court stage, to show the largest amounts across all countries. This is important because it means that we can start to generate a cash flow in a more time-efficient way for investors.

Next month, we will do a comparison of how the cash amounts recovered have changed and why.

A snapshot of the recovery process stages, where do the numbers currently stand?

Welcome to the start of our monthly overview of the recovery stages. Here, we’ll show you exactly how many loans are in each stage of the recovery process and going forward we can compare how it has changed from month to month. While we have tried to assign all loans to a specific stage as of the date of the report, the recovery stages are sometimes not promptly updated so individual loans may occasionally fall under incorrect stages.

recovery process stages

*Data as of 31/10/2017

Why is this important?

In case you missed our previous post, you might firstly find it useful to check out our 3 step collection and recovery process. This explains everything you need to know about each stage and sub stage you see above. Soon, we aim to improve the view and reporting on your Bondora account so you can see all the information about what stage your loan is at in the recovery process along with a reminder of what happens at each stage.

Why do Estonia and Spain have more cases waiting to be filed than Finland?

Thanks to access to technology and cooperation with local courts, we have been able to automatically file cases in Finland with more speed and efficiency than other countries. The success of this is also visible in the section showing how many of these cases are now with the bailiff. Going forward, we will soon have access to similar technology in Estonia, Spain and Slovakia which will allow us to progress each case to the bailiff stage at a more efficient rate.

Why is the bailiff stage important?

This is a critical step in the recovery process for a number of reasons, most importantly because the bailiff has the rights to freeze the debtor’s assets and accounts to cover the payments owed. Once successful, this stage is usually where a cash flow is generated and you will start to see payments come in to your Bondora account.

What next?

After we have implemented the changes to improve the ‘Default & Court’ phase, our next priority will be to improve the cooperation and data flow with the bailiff’s as we start to hand them more cases. It’s important that we get this right because it will help us get accurate updates on the progress that they are making with individual loans, in turn allowing us to update our investors with this information on a more regular basis.

Next month, we will do a comparison of how the cases have moved and why.

Average Recovery Rate for 2014 – 2017 is 47.2%

Welcome to our monthly blog post on the performance of recoveries, below we look at the percentage of principal and interest retrieved between 2014 – 2017.

Recovery-rates-2014-2017-Bondora

Why is 2017 showing the lowest recovery rate?

On first glance, this may appear to show that the success of our recoveries process has slightly decreased since 2014. However, it is important to note that the latest year will almost always show the lowest recovery rate. Quite simply, this is because the loan is moving through our 3-step collection process and is not yet generating a cash flow or has only recently started generating a cash flow.

What has changed?

Recently, we published a post covering our 3-step collection and recovery process which explains exactly what happens when a borrower stops making their payments. In Finland, once the borrower defaults the case is then automatically filed with the courts and this will soon be the same process in Estonia and Spain thanks to access to new technology.

Interested to learn more about recovery rates?

You can find more information related to our recovery process below: