Monthly origination summary for August 2017

Loans issued in August 2017 came in at €2,926,457. The figure is well above the running average for the year. August was the third strongest month for originations in 2017 outpaced by only January and March. As a new and younger demographic enters the workforce more are turning to the convenience, speed and affordability of marketplace lending. This global growth may explain the latest surge of originations at Bondora. Meanwhile, more investors are engaging lenders as our interest rates remain strong and rates on comparable investments remain low as a result of historical quantitative easing globally.

Loan origination by country

As usual Estonia was the leader on loans issued amounts. However, the total share of the country was slightly lower than many previous months. The country represented less than 60% of the total share reaching 59.91%. Meanwhile, Spain came in at 17.57% and Finland represented nearly a quarter of the total with 22.51%. August was the first month of 2017 to see Estonia drop below 60%. In fact, in many months this year the country represented portions reaching as high as 77%. The change occurred after Spain and Finland started producing more loans with lower risk ratings – AA-B rated loans in Finland and C-E rated loans in Spain. This more equitable distribution is mostly the result of improved scoring and pricing models released in spring/early summer.

Share by country – August 2017
Country Interest Amount Share
ESTONIA 20.96% 1753306 59.91%
SPAIN 131.65% 514293 17.57%
FINLAND 50.79% 658858 22.51%

Loan origination by rating

Nearly half of the originations focused in the “B,” “C,” and “D” rated loans (47% total) as investors continue to reach for growth with a mild exposure to risk. “AA,” and “A” rated loans represent the lowest share at around 6% each. “HR” rated loans had the largest share of any group at 19%.

  • “C” rated loans led the group representing 20.13% of the total. These loans represented 18.11% of all Estonia’s originations, meaning that Estonia was a big driver of “C” rated loans for the month. Additionally, interest rates within this rating were strong in both Estonia and Finland commanding 21.13% and 20.47% respectively.
  • As usual, “AA” rated loans represented the smallest portion at just 5.41% and available only in Estonia and Finland. “A” rated loans were similar at 6.27%. It should be marked that the total share of AA and A loans is more than doubled since spring.
  • Riskier “E” and “F” rated loans across all markets represented 11.82% and 10.80% respectively.
  • Investors were not afraid to reach for a higher return with their investment strategies with the riskiest “HR” loans which were the second largest portion of the total at 18.59% with triple-digit returns in the Spanish market.
  • “B” and “D” rated loans were nearly identical at 13.67% and 13.32% respectively, representing a continued preference for risk mitigating while seeking higher returns.
Share by country and rating – August 2017
ESTONIA SPAIN FINLAND
Rating Interest Amount Share Interest Amount Share Interest Amount Share
AA 9.97% 150009 5.13% 9.52% 8196 0.28%
A 11.76% 151764 5.19% 12.14% 31616 1.08%
B 15.13% 388597 13.28% 15.26% 11484 0.39%
C 21.13% 530042 18.11% 22.02% 530 0.02% 20.47% 58447 2.00%
D 28.70% 336356 11.49% 29.25% 19078 0.65% 29.35% 34253 1.17%
E 34.32% 196008 6.70% 37.39% 36255 1.24% 37.74% 113583 3.88%
F 35.73% 530 0.02% 53.81% 65764 2.25% 50.98% 249800 8.54%
HR 158.51% 392666 13.42% 89.83% 151479 5.18%

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