Loan originations increased over previous month reaching €3,017,555. Much of this month’s originations comes from Estonia which comprises 75.60% of the total. This proportion exceeds the same measurement for January and February of this year. Most of the originations fell on ratings B, C and D which held a combined share of over 60% of all March loan originations.

Loan origination by country

Estonia leads the pack with 75.60% share of the total, followed by Spain at 12.92% and Finland at 11.48%. Part of Estonia’s larger presence comes from “AA” and “A” rated loans which are not offered by Spain or Finland. However, even among “B” through “E” rated loans Estonia is generating more originations. Some of this performance may be the result of a thriving P2P market and greater demand within the country compared to Spain and Finland. March’s figures represent a trend in this regard. Estonia captured 62.98% of the total in January and 70.24% in February.

Share by country – March 2017
CountryInterestAmountShare
ESTONIA20,43%228125075,60%
SPAIN101,28%38988012,92%
FINLAND51,72%34642511,48%

Loan origination by rating

A concentration within “C” rated loans appears to illustrate a drive towards larger returns. This middle ground of risk offers more aggressive returns amid slightly elevated risk. This acceptance of risk steadily drops off moving down the list from “D” to “F” loans. Interestingly, “HR” loans still capture a significant portion of the total (14.70%) as it appears there is a segment committed to seeking outsized returns in exchange for riskier loans.

  • It’s important to remember that investors can only fund the loans that are available. For example, “A” and “AA” rated loans are a much smaller portion relative to “HR” loans. This difference is due, in part, to the characteristics of borrowers in the market.
  • Investors considering “E” “F” and “HR” loans in the Spain and Finland markets appear to choose return over risk.
  • Finland has the most even distribution of originations among ratings. This wide sampling of credit risk represents an equitable distribution of risk and return among investors within the country.
Share by country and rating – March 2017
ESTONIASPAINFINLAND
RatingInterestAmountShareInterestAmountShareInterestAmountShare
AA10,00%267450,89%
A11,78%1183703,92%
B14,65%55578518,42% 17,05% 37200,12%
C19,19%77012525,52%23,95%391451,30%
D25,35%46244015,32%27,89%381401,26%
E31,82%2942559,75%37,33%42700,14%36,34%754252,50%
F36,11%535301,77%41,14%464601,54%46,63%855702,84%
HR108,87%33915011,24%87,58%1044253,46%

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