Defaulted loan purchases increase by 203%

Welcome to May’s Secondary Market statistics blog post. Recently, we talked about the most common methods used to purchase current, overdue and defaulted loans and whether these transactions were made at a premium, discount or par value.

Below, we are going to do the same based on the statistics received in April.

Total volume

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In April 2018, the total amount of investments purchased through the Secondary Market totalled €845,556.93, an increase of approximately 15% since last month. Whilst the order of the most popular methods for making the purchases did not change, the total share and distribution saw some variances compared to previous months. In April, the percentage of manual investments made increased by just over 14% since March although the share of the total decreased slightly to 31.7%. Similarly, the amount of investments purchased via the API on the Secondary Market increased by 24% and the total share for the month increased to 26.7%. Along with the increases in investments purchased manually and via the API, Portfolio Manager saw an increase of over 10% and held approximately 41.6% of the total share.

Current loans

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In line with previous months, Portfolio Manager still leads the way in purchasing current loans at a par value. On the other hand, manual investors were the most successful at purchasing current loans at a discounted value. In addition to this, manual investors purchased €82,070.76 of current loans at a premium, compared to €49,081.75 via the API. Whilst there is essentially no priority given to the Portfolio Manager for any loans, it is very fast and is still the most popular investment method among all of Bondora’s customers. As a reminder, no priority is given to any investment method (including Portfolio Manager) and is not biased based on an investor’s portfolio size.

Overdue loans

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In April, we saw a reduction of 22% in the total amount of overdue loans purchased through the Secondary Market. The majority of these transactions were completed manually and at a discount.

Defaulted loans

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Overall, the total amount of defaulted loans purchased through the Secondary Market increased by a huge 203% in April. The most notable change here is the volume of the amount purchased manually and at a discount, in March this figure stood at €23,066.09 where as in April this surged to €81,198.45 (+252%). In comparison, only €4.59 of defaulted loans were purchased at a premium. A unique strategy used by a small number of investors is to purchase defaulted loans with a significant discount with the plan to reap the rewards once the collection and recovery process begins to generate a cash flow.