In the upcoming weeks we are going to release a few major improvements to the loan application process aimed at limiting the time the investors’ capital is locked in the loans and does not generate return.

Earlier this summer we started factoring in funding availability when making loan offers to the borrowers, and we already see fewer loans on the market that end up unfunded. We are going to continue our efforts with the following changes:

  • We will perform analyst review of the applicants’ information and provided documents before listing the loan application on the Primary Market. This change will eliminate loan cancellations that are caused by the discrepancies in the provided information.
  • Further, we will require loan applicants to complete bank account, ID and address verification before listing the loan application on the Primary Market. This change is expected to limit loan cancellations due to incomplete verification of the applicant.
  • We will also eliminate two bits of functionality to reduce privacy concerns raised by our customers. Primary Market questions and answers section will be removed along with a download link under My Investments to the loan application document signed by the borrower.
  • Finally, we will limit the time that a loan is listed on the Primary Market by half, as part of our ultimate goal of getting all loans that we list on the market to be funded within 24 hours. This change will limit the time when investors capital is locked in the “reserved” status and produces no return.

According to the laws, loan applicants should have a right to cancel their loans applications; however, we believe that the above changes will allow us to minimize the “opportunity cost” for investors in case of such cancellations.

27 responses to “Platform update: minimizing cash drag through loan application process improvements”

  1. The first two mentioned changes (verification of documents and ID before listing) should have been implemented for quite some time. The limitation of time which loans are listed on primary market is nice to have but not really necessary.

    But when will you implement changes in the portfolio manager (possibility to select between countries and / or between fully verified and non-verified loans)? An answer to that question would be appreciated.

    • Thanks for the positive feedback. We will launch an API in September that will allow investors to create custom and advanced filters as well as own scoring. This however will not be implemented in the UI but we’ll soon likely have third party service providers who can offer such a service on top of the API.

    • If you plan to launch API, why you not publishing at least preliminary documentation? Number of us will be interested to be prepared and like to plan works

    • Hello Andrei, thanks for your questions. We cannot publish API documentation yet because the API is in development and it may change. Also, we don’t have environmet set up for API production and sandbox (for developers)

    • They selected way and go it. This is post from my another comment buy suites there:”Unfortunately with Bondora it could be always so, that if private lenders will build good API+scoring (better than some special customer of Bondora), API will be changed in order to close such possibility. Or API calls will go to “queue” to allow some special guys or Bondoras PM to get good segment bids.”

    • In the future we’ll have two channels for executing bids:
      1) API (hopefully with third party service providers creating services on top of it for people who want advanced analytics/filtering)
      2) Portfolio Manager which will be further

      Bid execution rules are not known however it is likely that whole loan buyers and/or Portfolio Managers will be have a better position in the queue.

    • Partel, it means there will be no Primary market like it is available now? And when you say “whole loan buyers ” you mean investors into each loan or investors who fill whole loan at once?

    • Hi Andrej, it is likely that one day we’ll discontinue the Primary and Secondary market ‘views’ in our system as we move over to the API and API based trading as well as start including Secondary market loans in Portfolio Managers. Essentially will likely become a very light and easy-to-use user interface aimed at borrowers and passive investors. Advanced investors with more complex needs will be supported over APIs where we might create separate services under different brands catering for specific needs however we are betting that a community of developers will become active as well to create such services.

      Yes, whole loan buyers are investors who fund 100% of the loan and typically only want full loans.

  2. I don’t see the necessity to remove the functionality of the Primary Market questions and answers section. If there are some inconsistencies in the application or points on which clarification are needed, it is very useful to be able to ask the applicant directly. The applicant is not obliged to reply, so I do not see this as a privacy issue. It also increases the likelihood of investing if a good reply is given.

    Regarding the withdrawal of access to the borrower’s loan application, doesn’t the lender have the right to know who he is lending to?