No F or HR rated loans issued in Estonia in Q4 of 2017 – More stats here

Welcome to another data blog post from Bondora, below we take a look in to the actual and targeted net returns from investments by country, year and quarter. It’s important to note that the most recent quarter will nearly always show a higher return as the loans have only recently been issued and at this point the interest element accounts for a high percentage of the total payment, this is why we discuss data that is specifically over 12 months old below.

We have marked the figures with three different colors, firstly light orange to represent 50 or less loans issued, light blue for 51 – 200 and white for 201+. This is a great way to spot anomalies, such as high volatility in low risk ratings.

Key takeaways

  • Across all countries, the best performing quarter so far was seen in Q1 of 2016 at 15.59%, 1.86% above the target.
  • C rated loans in Estonia are the only credit grading which have been issued over 200+ PCS each consecutive quarter since 2015. In Spain, the same is true for HR rated loans except for Q2 of 2015.
  • Q3 of 2017 was the first quarter that saw more than 200 PCS issued in AA and A credit ratings in Estonia. This followed suit in Q4 of 2017.
  • The best performing year overall was in 2010 at 29.74% actual net return.
  • Q3 of 2017 was the first quarter that saw more than 200 PCS issued in F and HR rated loans in Finland.

Actual and targeted net returns across the board by year

Across all countries and risk ratings, the highest actual net return was seen in 2010 at 29.74%. While this is significantly higher than the most recent figures, it’s important to note that this is from a much smaller sample of loans (1,126 to be exact). Compared to the most recent year, a total of 17,933 loans were issued in 2017.

As mentioned in previous posts, the most recent data will nearly always show a high return as the loans have only recently been issued and at this point the interest element accounts for a high percentage of the total payment. Older data, for example 2009 – 2013, have the highest return as loans from this period may still receive a cash flow from recovery payments. This reinforces how you can maximise your absolute return in P2P by taking a long term view with your investments.

portfolio-performance-yearly-april-2018-en

Today, approximately 99% of investments are made automatically and hassle-free via our Portfolio Manager and Portfolio Pro features, both of which are completely free to use for all investors. When you choose either strategy, you will be given an indication of the distribution of your investments by country and risk rating.

Actual and targeted net returns across the board per quarter

  • Overall, the average actual net return across all quarters comes in at 13.40%, slightly below the target average of 14.65%.
  • The best performing quarter in 2015 was Q4 at 12.83%, in 2016 this was Q1 at 15.59%.

portfolio-performance-quarterly-april-2018-en

Estonia

  • Q4 of 2017 was the first quarter where no F rated loans were issued, and the 5th consecutive quarter where no HR loans were issued.
  • For data over 12 months old, the best performing quarter is Q3 of 2015, this quarter saw over 200 PCS issued in C rated loans only.
  • The highest number of PCS issued in Estonia was in Q4 of 2017 at 3,600, however the highest amount was in Q2 of 2017 at €6,091,449 and 2,524 PCS.

portfolio-performance-EE-april-2018-en

Finland

  • Only a small percentage of Finnish loans issued total over 200 PCS per credit grading, most recently in Q3 of 2017 this was seen in F & HR ratings.
  • The highest total actual net return across the board (over 12 months old) was in Q1 of 2016 at 14.12%.
  • The actual net return figure for Q4 of 2016 B rated loans shows a rate of -46.33%, however the data is significantly skewed due to less than 5 loans being issued.
  • In Q4 of 2017, the highest number of loans issued were in F rated loans.

portfolio-performance-FI-april-2018-en

Spain

  • Q3 of 2017 saw the highest number of HR loan PCS issued in Spain.
  • The highest total actual return figure over 12 months old was seen in Q1 of 2016 at 22.68%.
  • The highest number of loans were issued in Spain in 2017 at 4,174 PCS and €4,769,825, this figure was only 61 PCS and €266,400 in 2013.
  • Volatility is expected in credit ratings with a higher expected default rate, which is why we always encourage a diversified portfolio of investments.

portfolio-performance-ES-april-2018-en

Remember, to maximize your net return you should view investing with Bondora as something long term.

Average net income continues to increase in Estonia and Finland

Recently, we have released several posts that explore the origination of loans by unique data like home ownership, education, employment duration and more. This month, we’re going to do the same and compare how this has changed in comparison to the previous months.

Average income, loan amount and age

In March, the average net income continued the month-on-month increase in Estonia (+24%/€448) and Finland (+2%/€75) but saw a reduction in Spain (-16%/€498). The total number of loans also increased in March (1,610 total) but were still lower than January (1,919). With a larger loan sample, we would expect to see less volatility in the net income and loan amount figures.

origination-avg-net-income-mar-2018-en

Despite the large increase in the average net income in Estonia, the average loan amount remained static. In Finland and Spain, the average loan amount decreased with the largest change seen in Finland (-13%).

origination-avg-loan-amount-mar-2018-en

Whilst the figures are relatively static in Estonia and Finland, the largest change seen in March was a decrease in the average age of Spanish borrowers. Overall, we commonly see the figures fall within the early to late 40’s range. Interestingly, along with a decrease in the average net income in Spain the average age has also decreased by three years.

origination-avg-age-mar-2018-en

The average loan duration in March was higher in all countries. For a more representative indicator, take a look below at the most common durations.

origination-avg-loan-duration-mar-2018-en

Loan and employment duration

Traditionally, Bondora has not focused on issuing short term loans and this is still clearly visible from the most recent data. Only 11 loans in total were issued under a duration of 12 months and were originated in Estonia. The majority of loans issued had a duration of 36 months or above and only a total of 81 loans were issued with a smaller duration than this. More specifically, the most common loan duration across all countries was 36 months, followed by 60 months and 48 months. Offering the option to take a loan with a duration of up to 60 months allows borrowers to have affordable monthly payments that they can budget for, along with their other commitments.

origination-durations-table-mar-2018-en

Employment duration remains the same as previous months, with ‘More than 5 years’ being the most common followed by ‘Up to 5 years’ and ‘Up to 1 year’. This suggests that those who are confident in the stability of their employment (and ultimately their monthly income) are most likely to apply for a loan.

origination-employment-table-mar-2018-en

Education and home ownership

Similarly to previous months, the most common type of education declared by borrowers is of a High School standard, followed by University, Vocational School and Junior High School. Per country, the figures show a different story; In Estonia the most common is still High School, Vocational School in Finland and University in Spain. Whilst education curriculums and institutions also vary by country, it provides an interesting observation when compared with other data points.

origination-education-table-mar-2018-en

The most common home ownership status in Estonia and Finland is ‘Owner’, in comparison the most common in Spain is ‘Tenant’. In previous months, the status has been the same in Estonia and Finland, however it seems to fluctuate in Spain since the distribution is much more evenly spread other than ‘Council House’ and ‘Other’. Home ownership status can give us an insight in to the cultural differences between different geographies and how this can influence the wider economy. For example, in Finland only 1 borrower was registered as ‘Living with parents’. In Estonia, just under half of all borrowers are owners of their home.

origination-ownership-table-mar-2018-en

Verification

The data below shows how many customer’s income and expenses have been verified. Regardless of whether the borrower’s income has been verified, the background checks with population and credit referencing agencies are still conducted. Overall, the total number of customers classed as verified are higher than those classed as unverified.

origination-verification-table-mar-2018-en

Which data point is the most important?

The individual risk of issuing a loan to a borrower is calculated using all of the parameters above and many more. The self-reported data which is displayed to investors is typically not very predictive and has relatively little influence on the Bondora rating of a particular loan. Therefore, this information should not be viewed as the only data used in determining the expected default rate of a loan.

Overall, this post can give you a great idea of the basic profile of our borrowers and how this changes with the origination of loans in the coming months. Leave us a comment below and let us know which data points you think are the most influential in credit scoring.

Bondora approaches 35,000 investors!

Welcome to the monthly origination post for March 2018, here we go in to detail about the distribution of investments that were made and some interesting stats per country of origin. If you missed February’s post, you can check it out here. The total amount invested in the platform in March was €3,133,458, a reduction of 0.5% since the previous month. At the time of writing, Bondora now has 34,902 investors.

Loan Origination by country

While the distribution of investments by country were similar to the previous months, there were some slight changes again. Estonia still has the highest share of investments at 66.40%, an increase of nearly 6% since the previous months and higher than the share seen in December and January. In comparison, the share in Finland has decreased for the first time since December to 27.16%, compared to 31.06% in February.

In Spain, we are now seeing the lowest share of investments this year at 6.44% of the total, or €201,657. While the share decreased, the average interest rate in Spain increase by approximately 1.5% whereas the figures decreased slightly in Finland and remained relatively static in Estonia.

origination-summary-country-march-2018-en

Share by rating, country and amount

The table below contains the weighted average interest rate, total amount and share per country of origination and rating. Here are some key takeaway’s we can see:

  • Loans graded with a ‘D’ rating account for the highest share of investments at 20.45% of the total, closely followed by ‘C’ rated loans at 19.81%.
  • ‘HR’ rated loans had the lowest number originated at 2.18% of the total share (a further decrease since last month), slightly higher is AA rated loans at 2.79%.
  • Finnish ‘F’ rated loans account for the highest share in the country’s total originations at 43.03%, approximately 3% less than the previous month
  • Across the same credit ratings, the average interest rate is the lowest in Estonia in all cases other than AA & B rated loans in Finland
  • The lowest average interest rate across all countries was seen in ‘AA’ rated loans in Finland at 9.08%.
  • 95.61% of the total share in Spain consists of F and HR rated loans, an increase of nearly 4% since February and considerably more compared to the previous months.

origination-summary-country-rating-march-2018-en

What conclusions can you draw from this data? We would love to hear them, leave us a comment below and let us know.

Portfolio Manager back on top

Welcome to another post from our monthly funding statistics series. Here, we talk about the most popular investment methods used by our customers in March and how this has changed since the previous month.

funding-stats-march-2018

funding-stats-february-2018

Against the trend of previous months, Portfolio Pro decreased in popularity in March and the percentage of investments made through the tool have decreased. Now standing at 35% of the total investments we saw a reduction of 7% compared to the previous month. In line with this, the Portfolio Manager share increased by 7% and accounts for 64% of the total.

The percentage of investments made through the API remained static at 0.7% of the total (rounded figures in the graph), due to the technical skills required for this option we do not expect to see this fluctuate on a monthly basis, as seen with the other investment options.

The total amount invested in the platform remained relatively similar to the previous month. Look out for our upcoming post on where the highest percentage of investments have been made, breaking it down by country, risk rating and durations.

If you’re still unsure of the differences between each investment method, here’s a brief summary:

* * *

If you’re still unsure of the differences between each method, here’s a brief summary:

Portfolio Manager – Simply select a strategy ranging from ultra-conservative to opportunistic, deposit funds and you’re ready to go. No further management is required as the Portfolio Manager takes care of everything for you. If you want to leave a certain amount of cash on your account that won’t be invested, go in to your settings and adjust the Spare Cash Balance slider to your desired amount. It’s easy!

portfolio-manager-strategy

Portfolio Pro – Now you have more control. Select the risk ratings you want to invest in (ranging from AA – HR), select which countries, your preferred loan durations and it’s done. If you wish, you can also add a few more rules like the range of interest rates applied to the loan and also the bid size. We will then give you an expected return range along with the distribution you can expect across your selected filters.

portfolio-pro-filter

For a further comparison between the two, check out our video on the topic here.

API – Use your programming skills to access the functionalities of the Bondora platform without using our web interface. The API gives you the ability to bid on specific loans by using different data points such as borrower’s income, country, loan status and many more that fit your personal investment strategy.

What is your favorite method? Let us know in the comments below.

Defaulted loan purchases decreased by 24% in February

Welcome to March’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 February.

Total Volume

secondary-market-stats-totals-march-2018-en

In February, the total amount of investments purchased through the Secondary Market reached totaled €685,485.36, a decrease of approximately 31% 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 February, the percentage of manual investments made decreased by nearly 18% since January although the share of the total increased by 5% to 33%. Similarly, the amount of investments purchased via the API on the Secondary Market decreased by over 22% but the total share for the month increased to 19%. Along with the increases in investments purchased manually and via the API, the Portfolio Manager saw a reduction of over 7% to approximately 47% of the total share.

Current loans

secondary-market-stats-current-march-2018-en

In line with previous months, the Portfolio Manager still leads the way in purchasing current loans at a par value. On the other hand, the API was the most successful at purchasing current loans at a discounted value. While there is essentially no priority given to the Portfolio Manager tool 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 method (including the Portfolio Manager) and is not biased based on an investor’s portfolio size.

Overdue loans

secondary-market-stats-overdue-march-2018-en

In February, we saw a very small reduction of 8% 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

secondary-market-stats-defaulted-march-2018-en

Overall, the total amount of defaulted loans purchased through the Secondary Market decreased by over 24% in February compared to the previous month and even more so since December. The most notable change here in February is the amount purchased at a premium, in January this figure stood at only €18 where as in February this increased to €5,589, nearly all of which was completed manually. Approximately 99.7% of defaulted loans purchased via the API were done at a discount. 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.

Good to know

Selling your loans can result in a loss of the original principal, as the secondary market typically does not provide a high enough premium for current loans to compensate for the non-performing part of the portfolio. Therefore, we advise to proceed with caution and not to try and sell everything at once if you see a percentage of your portfolio in default. It is likely that you will quickly sell the performing part of your portfolio and be left with the loans in recovery, significantly damaging your expected return.

The speed of the sales process depends on the market demand. In general, current loans are more liquid and will usually be sold within a day if sold at par value or a slight premium. Delinquent loans may take more time or the sale can be unsuccessful. As soon as another investor has purchased your loan, you will receive the funds directly to your Bondora account.

If you’re still unsure how to sell your loans, you should always get in touch on investor@bondora.com and have a chat with one of our experienced Investor Relations Associates who will walk you through it step by step.

63% increase in average net income – Can you guess which country?

Recently, we have released several posts that explore the origination of loans by unique data like home ownership, education, employment duration and more. This month, we’re going to do the same and compare how this has changed in comparison to the previous months.

Average income, loan amount and age

In February, the average net income figure increased across the board again with the largest absolute increase seen in Spain (+ €1,221/63% since January). Along with seasonal fluctuations, we believe the significant increases can be attributed to volatility due to a smaller sample of loans (1,558) compared to the previous month (1,919).

origination-avg-net-income-feb-2018

Similar to the increase in the average net income, the same trend is visible in the average loan amount. In absolute terms, the highest increase was in Finland.

origination-avg-loan-amount-feb-2018

The average age of borrowers has changed slightly since January in Spain and Finland, however overall we commonly see the figures fall within the early to late 40’s range. Interestingly, along with a high increase in the average net income in Spain the average age has increased by two years.

origination-avg-age-feb-2018

The average loan duration in February was higher in Spain and Finland, but remained the same in Estonia. For a more representative indicator, take a look below at the most common durations.

origination-avg-loan-duration-feb-2018

Loan and employment duration

Traditionally, Bondora has not focused on issuing short term loans and this is still clearly visible from the most recent data. Only 12 loans in total were issued under a duration of 12 months and were originated in Estonia. The majority of loans issued had a duration of 36 months or above and only a total of 82 loans were issued with a smaller duration than this. More specifically, the most common loan duration across all countries was 36 months, followed by 60 months and 48 months. Offering the option to take a loan with a duration of up to 60 months allows borrowers to have affordable monthly payments that they can budget for, along with their other commitments.

origination-durations-table-feb-2018-en

Employment duration remains the same as previous months, with ‘More than 5 years’ being the most common followed by ‘Up to 5 years’ and ‘Up to 1 year’. This suggests that those who are confident in the stability of their employment (and ultimately their monthly income) are most likely to apply for a loan.

origination-employment-table-feb-2018-en

Education and home ownership

Similarly to previous months, the most common type of education declared by borrowers is of a High School standard, followed by University, Vocational School and Junior High School. Per country, the figures show a different story; In Estonia the most common is still High School, however in Finland and Spain University is the most common. Whilst education curriculums and institutions also vary by country, it provides an interesting observation when compared with other data points.

origination-education-table-feb-2018-en

The most common home ownership status in Estonia and Finland is ‘Owner’, in comparison the most common in Spain is ‘Living with parents’. In previous months, the status has been the same in Estonia and Finland, however it seems to fluctuate in Spain since the distribution is much more evenly spread other than ‘Council House’ and ‘Other’. Home ownership status can give us an insight in to the cultural differences between different geographies and how this can influence the wider economy. For example, in Finland only 2 borrowers were registered as ‘Living with parents’. In Estonia, just under half of all borrowers are owners of their home.

origination-ownership-table-feb-2018-en

Verification

The data below shows how many customer’s income and expenses have been verified. Regardless of whether the borrower’s income has been verified, the background checks with population and credit referencing agencies are still conducted. Overall, the total number of customers classed as verified are higher than those classed as unverified.

origination-verification-table-feb-2018-en

Which data point is the most important?

The individual risk of issuing a loan to a borrower is calculated using all of the parameters above and many more. The self-reported data which is displayed to investors is typically not very predictive and has relatively little influence on the Bondora rating of a particular loan. Therefore, this information should not be viewed as the only data used in determining the expected default rate of a loan.

Overall, this post can give you a great idea of the basic profile of our borrowers and how this changes with the origination of loans in the coming months. Leave us a comment below and let us know which data points you think are the most influential in credit scoring.

92% of the total share in Spain consists of F and HR rated loans

Welcome to the monthly origination post for February, here we go in to detail about the distribution of investments that were made and some interesting stats per country of origin. If you missed January’s post, you can check it out here. The total amount invested through the platform in February was €3,151,515, an 11% reduction since January. At the time of writing, Bondora now has 34,256 investors.

Loan Origination by Country

While the distribution of investments by country were similar to the previous months, there were some slight changes again. Estonia still has the highest share of investments at 60.68%, although this has decreased from 63.5% in January and 65.29% in December. In comparison, the share has increased month-on-month in Finland from 25.23% in December, to 28.40% in January and 31.06% in February.

Over the same 3 month period, the share in Spain has only fluctuated by a total of 1.39% and now stands at 8.27% for February. While the average interest rates have only increased by 0.38% in Estonia since December, the figure in Finland has increased by 3.63%, which could provide a possible rational for investors placing more of their funds into Finnish loans.

origination-share-country-february-2018-en

Share by rating, country and amount

The table below contains the weighted average interest rate, total amount and share per country of origination and rating. Here are some key takeaway’s we can see:

  • Loans graded with a ‘C’ rating account for the highest share of investments at 19.07% of the total, closely followed by ‘D’ rated loans at 18.71%.
  • ‘HR’ rated loans had the lowest number originated at 2.30% of the total share, slightly higher is AA rated loans at 2.55%.
  • Finnish ‘F’ rated loans account for the highest share in the country’s total originations at 46.52%, an increase of 10.81% since January.
  • Across the same credit ratings, the average interest rate is the lowest in Estonia in all cases.
  • The lowest average interest rate across all countries was seen in ‘AA’ rated loans in Estonia 10.18%.
  • 91.7% of the total share in Spain consists of F and HR rated loans, this figure stood at 78.3% in the previous month.

origination-share-country-rating-february-2018-en

What conclusions can you draw from this data? We would love to hear them, leave us a comment below and let us know.

Portfolio Performance – Check out the latest figures here

Welcome to another data blog post from Bondora, below we take a look in to the actual and targeted net returns from investments by country, year and quarter. It’s important to note that the most recent quarter will nearly always show a higher return as the loans have only recently been issued and at this point the interest element accounts for a high percentage of the total payment, this is why we discuss data that is specifically over 12 months old below.

We have marked the figures with three different colors, firstly light orange to represent 50 or less loans issued, light blue for 51 – 200 and white for 201+. This is a great way to spot anomalies, such as high volatility in low risk ratings.

Key takeaways

  • Across all countries, the best performing quarter so far was seen in Q1 of 2016 at 15.87%, 2.14% above the target.
  • C rated loans in Estonia are the only credit grading which have been issued over 200+ PCS each consecutive quarter since 2015.
  • Q3 of 2017 was the first quarter that saw more than 200 PCS issued in AA and A credit ratings in Estonia.
  • The best performing year overall was in 2010 at 29.73% actual net return.
  • Q3 of 2017 was the first quarter that saw more than 200 PCS issued in F and HR rated loans in Finland.

Actual and targeted net returns across the board by year

Across all countries and risk ratings, the highest actual net return was seen in 2010 at 29.73%. While this is significantly higher than the most recent figures, it’s important to note that this is from a much smaller sample of loans (1,126 to be exact). Compared to the most recent year, a total of 12,424 loans were issued in 2017. As mentioned in previous posts, the most recent data will nearly always show a high return as the loans have only recently been issued and at this point the interest element accounts for a high percentage of the total payment. Older data, for example 2009 – 2013, have the highest return as loans from this period may still receive a cash flow from recovery payments. This reinforces how you can maximise your absolute return in P2P by taking a long term view with your investments.

portfolio-performance-yearly-february-2018

Today, approximately 99% of investments are made automatically and hassle-free via our Portfolio Manager and Portfolio Pro features, both of which are completely free to use for all investors. When you choose either strategy, you will be given an indication of the distribution of your investments by country and risk rating.

Actual and targeted net returns across the board per quarter

  • Overall, the average actual net return across all quarters comes in at 13.33%, slightly below the target average of 14.76%.
  • The best performing quarter in 2015 was Q4 at 13.01%, in 2016 this was Q1 at 15.87%.

portfolio-performance-quarterly-february-2018

Estonia

  • When looking at the total actual return across all credit ratings, the actual return has been higher than the target in every quarter but one (2015 Q2).
  • For data over 12 months old, the best performing quarter is Q1 of 2016, this quarter saw over 200 PCS issued in C, D and E rated loan.
  • The highest number of PCS issued in Estonia was in Q3 of 2017 at 2,886, however the highest amount was in Q2 of 2017 at €6,091,449 and 2,524 PCS.

portfolio-performance-EE-february-2018

Finland

  • Only a small percentage of Finnish loans issued total over 200 PCS, most recently in Q3 of 2017 this was seen in F & HR ratings.
  • The highest total actual net return across the board (over 12 months old) was in Q1 of 2016
  • The actual net return figure for Q4 of 2016 B rated loans shows a rate of -43.02%, however the data is significantly skewed due to less than 5 loans being issued.
  • In Q1, Q2 and Q3 of 2017, the HR rating had the highest number of PCS issued overall.

portfolio-performance-FI-february-2018

Spain

  • Q3 of 2017 saw the highest number of HR loan PCS issued in Spain.
  • The highest total actual return figure over 12 months old was seen in Q1 of 2016 at 23.08%.
  • The highest number of loans were issued in Spain in 2017 at 2,642 PCS and €17,446,768 (not taking in to account Q4 data), this figure was only 61 PCS and €266,400 in 2013.
  • Volatility is expected in credit ratings with a higher expected default rate, which is why we always encourage a diversified portfolio of investments.

portfolio-performance-ES-february-2018

Remember, to maximize your net return you should view investing with Bondora as something long term.

Popular Portfolio Pro continues to grow

Welcome to another post from our monthly funding statistics series. Here, we talk about the most popular investment methods used by our customers in February and how this has changed since the previous month.

funding-stats-feb-2018

Following December and January’s trend, Portfolio Pro has continued to grow in popularity and the percentage of investments made through the tool have increased again. Now standing at 42% of the total investments, the Portfolio Manager has decreased in line with this and accounts for 57% of the total, 3% less than December. Look out for our upcoming post on where the highest percentage of investments have been made, breaking it down by country, risk rating and durations.

The percentage of investments made through the API remained static at 1% of the total, due to the technical skills required for this option we do not expect to see this fluctuate on a monthly basis, as seen with the other investment options.

* * *

If you’re still unsure of the differences between each method, here’s a brief summary:

Portfolio Manager – Simply select a strategy ranging from ultra-conservative to opportunistic, deposit funds and you’re ready to go. No further management is required as the Portfolio Manager takes care of everything for you. If you want to leave a certain amount of cash on your account that won’t be invested, go in to your settings and adjust the Spare Cash Balance slider to your desired amount. It’s easy!

portfolio-manager-strategy

Portfolio Pro – Now you have more control. Select the risk ratings you want to invest in (ranging from AA – HR), select which countries, your preferred loan durations and it’s done. If you wish, you can also add a few more rules like the range of interest rates applied to the loan and also the bid size. We will then give you an expected return range along with the distribution you can expect across your selected filters.

portfolio-pro-filter

For a further comparison between the two, check out our video on the topic here.

API – Use your programming skills to access the functionalities of the Bondora platform without using our web interface. The API gives you the ability to bid on specific loans by using different data points such as borrower’s income, country, loan status and many more that fit your personal investment strategy.

What is your favourite method? Let us know in the comments below.

Near €1M of Secondary Market Purchases in January

Welcome to January’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 January.

Total Volume

secondary-market-stats-totals-february-2018

In January, the total amount of investments purchased through the Secondary Market reached nearly €1M at €995,708.35, an increase of approximately 4% since last month. While 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 January, the percentage of manual investments made increased by over 20% since December and accounted for nearly 28% of the total. Similarly, the amount of investments purchased via the API on the Secondary Market increased by nearly 16%, with the total share for the month standing at over 17%. Along with the increases in investments purchased manually and via the API, the Portfolio Manager saw a reduction of over 5.5%.

Current loans

secondary-market-stats-current-february-2018

In line with previous months, the Portfolio Manager still leads the way in purchasing current loans at a par and discount value. While there is essentially no priority given to the Portfolio Manager tool for any loans, it is very fast and is still the most popular investment method among all of Bondora’s customers. As a reminder, the Portfolio Manager never purchases any loans at a premium.

Overdue loans

secondary-market-stats-overdue-february-2018

In January, we saw a very small increase of 7.5% 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

secondary-market-stats-defaulted-february-2018

Overall, the total amount of defaulted loans purchased through the Secondary Market decreased by over 28% in January compared to the previous month. The most notable change here is the amount purchased at a premium, in January this figure stood at only €18 where as in December this was a huge €13,613.34. Approximately €1,225 of defaulted loans were purchased via the API, with the remaining €40,148 being completed manually. 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.

Good to know

Selling your loans can result in a loss of the original principal, as the secondary market typically does not provide a high enough premium for current loans to compensate for the non-performing part of the portfolio. Therefore, we advise to proceed with caution and not to try and sell everything at once if you see a percentage of your portfolio in default. It is likely that you will quickly sell the performing part of your portfolio and be left with the loans in recovery, significantly damaging your expected return.

The speed of the sales process depends on the market demand. In general, current loans are more liquid and will usually be sold within a day if sold at par value or a slight premium. Delinquent loans may take more time or the sale can be unsuccessful. As soon as another investor has purchased your loan, you will receive the funds directly to your Bondora account.

If you’re still unsure how to sell your loans, you should always get in touch on investor@bondora.com and have a chat with one of our experienced Investor Relations Associates who will walk you through it step by step.