Investment in the secondary peer-to-peer market continues to increase on Bondora. In October, €1,127,037 in loans were purchased on the secondary market, an increase of 6.8% over the previous month. This increase was led completely by manual investments which rose significantly by 24.5% to €685,436. Meanwhile, secondary market investments via both API and portfolio manager were down over the month.

Secondary market volume - October 2018

Current Loans

When it came to current loans, the vast majority were purchased at par value, with purchasers neither paying a premium or receiving a discount for purchasing on the secondary market. This displays a good market equilibrium in which loans are being priced accurately on the secondary market as compared to their fair value.

Manual investors do the most purchasing of current loans, whether that be at a discount or for a premium. Manual investors purchased close to the equivalent of loans at a discount and for a premium, with €157,175 worth of loans purchased at a premium, and €159,955 worth of loans at a discount.

Current loans - October 2018

Overdue Loans

October continued the trend for overdue loans with most loans being purchased manually at a discount, accounting for €45,760, or 71%, of the total overdue loans purchased on the month. Overall, almost all overdue loans are purchased manually, as none of these loans are purchased via Portfolio Manager, and a miniscule 3% purchased via API.

There was a significant increase from €3,192 to €11,890 of overdue loans purchased at a premium. This is a potential sign of the Bondora secondary market that investors are more willing to pay a premium on overdue loans which they believe are likely to be paid, signaling an increase in risk-taking by these investors.

Overdue loans - October 2018

Default Loans

Similarly to overdue loans, the vast majority (84%) of defaulted loans were purchased manually at a discount, with over 99% of all defaulted loans purchased manually in general. Total default loan purchases totalled €198,814 on the month, an increase of €37,722, or, 23.4% compared to the previous month.

Defaulted loans - October 2018

Conclusion

The secondary market provides liquidity to investors looking to sell their loans. Investors looking to sell loans from their portfolio must be diligent when doing so as they are likely to obtain lower returns when selling significant portions of their portfolio. As seen by the secondary market data, current loans are generally sold at part value, while overdue and default loans most often are sold at a discount.

Bondora’s secondary market allows investors to sell multiple loans as a portfolio, sell to a specific user, or even cancel the sale if a payment is received. You can always reference more information about how to sell your loans here, or, get in touch with an experienced Investor Relations Associate at [email protected] to learn more.