In October, Bondora spread its lending across the board to many more borrowers, providing longer-term loans of less funds to an increasing array of customers. This is a positive sign for investors who are continuing to be provided more and more offerings and a diverse number of peer-to-peer investment options across a range of risk/return profiles.

Overall, the number of borrowers in Finland almost tripled as compared to the previous month, while Estonian lending was at more than a 50% increase.

Borrowing Amount and Average Income

The average net income for Bondora borrowers decreased in Finland (€2,571) and Spain (€1,631) as compared to the previous month, while the average income amount in Estonia remained essentially unchanged at €1,325. At the same time, Bondora issued significantly more loans in October than previous months. This bodes well for customers who strive for diversification, whether it be through the automated investing service offered by Go & Grow, or the more customizable diversification of Portfolio Manager or Portfolio Pro.

Average net income - October 2018

Bondora has mitigated its risk significantly by reducing the amount of capital being lent to borrowers, especially those in the lower income and employment levels. With a reduction in the average income of borrowers so to came a reduction the average amount borrowed. Finland saw the most drastic decrease of 25% to 2,790, while Spain experienced a similar 23% decline to an average loan of 1,428. Borrowing in Estonia was relatively unchanged, declining only 3% to 2,509.

average loan amount graph - October 2018

An Increase in Loan Durations

Finnish loans, as it was previously stated, saw an increase in F and HR rating offerings. This has also led to an uptick in the average length of loans out of Finland, with the average loan length 55 months as compared to 45 months in September. Longer loan durations give borrowers more time to pay back loans, while also increasing potential returns via absolute interest to investors. The trend in the average loan duration was directly seen in the raw data, where in September the majority of loans out of Finland were issued with 36 or 48-month durations, the overwhelming majority of loans in October (807 out of 1,031) came with 60-month durations.

Loan durations in Spain were up slightly once again to 43 months, while Estonian loan durations were down slightly to 50 months, comparable to numbers in September and August. Both of these figures are in-line with relatively small changes in loan size and average income of borrowers in both countries.

loan duration graph - October 2018

Personal Lending Data

Education level data didn’t experience any significant shift even with the increase in total loans issued. The only sizable difference is the increase in loans to those with vocational school education in Finland which comprised 47% (482) loans this month in the country as compared to only 28% (119) in September.

education chart - October 2018

In terms of housing, the majority of borrowers in Finland for October were tenants, as compared to last month where the majority were homeowners or had a home mortgage. A higher percentage of homeowners in Estonia received Bondora loans than last month, while Spain saw an increase in loans to those living with their parents, but also those who are homeowners as well.

home ownership - October 2018

The average age of Bondora borrowers decreased in Finland and Spain while remaining the lowest in Estonia at 41 years of age.

The majority of loans are still issued to those who have been employed by more than 5 years or those employed up to 5 years. This history of long and steady employment is a positive factor in the ability for a lender to pay back their debts.

employment chart - October 2018

Summarizing the Overall Trend

Each month Bondora releases its loan data to give investors an idea of the growth and breadth of investment options. October continued the trend of increasing loan offerings for investors. In this month, there was a sizable increase in loans with longer durations. Finland experienced this trend the most, as its loan offerings as a whole increased drastically. With a solid Finnish economy borrowers seem confident in their ability to maintain employment and pay back loans, especially over a longer period of time.

These offerings round out diversified investment options for all Bondora investors, with such diversification a hallmark of the Bondora peer-to-peer lending network. Loan origination trends vary from month-to-month and it can be difficult to make large generalizations about what loan originations may look like moving forward.

Regardless, Bondora will continue to provide its investors with detailed loan data and information to make the best investment decisions possible.