Monthly Loan origination summary – May 2016

Dear, readers. We are kicking off with different monthly summaries here on the Bondora marketplace lending blog. First up is our loan origination overview for month ending May 31, 2016 and soon will be followed by portfolio performance overview and recoveries.

In May 2016 we processed €46,628,230 worth of loan applications, out of which we approved €4,814,045 to the marketplace. In total our investors financed €2,120,425 worth of loans.

The above numbers show that our credit underwriting model is strong and we effectively weed out the people who shouldn’t get a loan and publish only the credit worthy borrowers according to their risk-grade. All this amounts to peace of mind for our investors that their capital is in good hands.

To further expand on the type of loans that were given out in May 2016 we made a country and grade level overview of the issued loans.

Loan origination by country

Share by country – May 2016
Country Interest Amount Share
ESTONIA 24,94% 1279550 60,34%
SPAIN 58,50% 250675 11,82%
FINLAND 31.34% 590200 27,83%
Total 30,69% 2120425
  • This data set covers the markets where Bondora currently performs lending activities – Estonia, Spain and Finland.
  • Out of all the issued loans in May 2016, the largest share of 60,34% went to Estonia in the amount of €1,279,550. Followed by Finland with 27,83% and Spain with 11,82%.
  • Borrowers from Spain on the other hand pay the highest interest rate of 58,50%, followed by Finnish borrowers with 31,34% and Estonian borrowers with 24,94%. This altogether plays a strong positive effect on investors’ returns.

Currently, 86% of bids on Bondora are made through the Portfolio Manager. Automated investing helps to better diversify investors’ portfolio and thus provides a more stable return.

Loan origination by grade

Share by country and grade – May 2016
Loan origination country EstoniaESTONIA Loan origination country SpainSPAIN Loan origination country FinlandFINLAND
BR Interest Amount Share Interest Amount Share Interest Amount Share
AA 9,58% 13050 0,62%
A 12,23% 36220 1,71%
B 15,75% 275035 12,97% 16,86% 19130 0,90%
C 21,06% 318075 15,00% 22,12% 87335 4,12%
D 26,23% 236605 11,16% 28,20% 187740 8,85%
E 31,90% 222030 10,47% 36,92% 7845 0,37% 33,41% 160435 7,57%
F 38,08% 130880 6,17% 40,92% 27690 1,31% 39,35% 108190 5,10%
HR 42,95% 47655 2,25% 61,55% 215140 10,15% 48,57% 27370 1,29%
Total 1279550 60,35% 250675 11,83% 590200 27,83%
  • Bondora Rating is an outcome of our credit scoring and pricing model that helps to package all different risk-return variables into one single number – the interest rate.
  • It can be seen from the above table that interest rates increase moving down from AA to HR grade, therefore Bondora Rating reflects the risk level of a loan.
  • When looking at origination of country and grade level, Estonian B & C grade loans make up the largest share of issued loans in the amount of €593,110.
  • Spanish HR has the highest average interest rate of 61,55% and that generated investors’ interest as 10,15% out of all loans were invested into them.

Loans quality is our top priority and we are working on constantly improving it. Our interest rates are based on a sophisticated fair pricing model that aims for fair loan prices for borrowers, considering their individual risk profiles as well as reasonable returns for the investors, taking into account credit risk and cost of capital.