Secondary Market remains unpredictable, growing again in January

Market & Pricing

The Bondora Secondary Market started 2021 in growth mode. Transactions totaled €396,072 over January—an 11.7% increase compared to December. As a result, the up-and-down trend of the Secondary Market is continuing.

The Secondary Market remains unpredictable, gaining again in January
The Secondary Market remains unpredictable, gaining again in January

Take a look at the month-over-month growth of the Market dating back to September 2020. As you can see, the Secondary Market has been quite unpredictable:

  • January 2021: +11.7%
  • December 2020: -32.8%
  • November 2020: +36.2%
  • October 2020: -16.1%
  • September 2020: 6.7%

Portfolio Manager transactions saw the most gains—up by 90.8% to €74,357. This figure came close to how much was transacted via the API in January (€77,193). Manual transactions were the only category to fall, declining by 6.2% to €244,520.

Total volume loan transactions – January 2021
Total volume loan transactions – January 2021

Current loans

Secondary Market transactions of current loans grew by €100,017 to €327,876. Current loans continue to be purchased at a premium on the Secondary Market, as 57.3% of all current loan transactions were done at a premium value. Additionally, after decreasing last month, all three Secondary Market categories were higher in January.

Current loan transactions – January 2021
Current loan transactions – January 2021

Overdue loans

Overdue loan transactions fell by 1.3% for the second month-in-a-row, albeit only slightly. This decrease was led by API transactions, which fell to €4,802.57—a decline of 12.8% on the month. Manual transactions grew a negligible amount, accounting for 86.1% of all overdue loan transactions.

Overdue loan transactions – January 2021
Overdue loan transactions – January 2021

Defaulted loans

Bucking the month’s overall trend, defaulted loan transactions plummeted lower in January, totaling €33,629. This is a decline of 63.3% month-over-month. However, this figure makes sense as this puts defaulted loan transactions slightly below overdue loan transactions, realigning with their historical trend. Oddly enough, even with such a decrease, there were more transactions at a premium, totaling €7,806.

Defaulted loan transactions – January 2021
Defaulted loan transactions – January 2021

An unpredictable market

When it looks like the Secondary Market is slowing down, along comes a month of increased transactions. This marks the fifth consecutive month of back-and-forth numbers for Secondary Market transactions. An 11.7% increase in transactions over the month is a positive way to start 2021, but it’s anyone’s guess about where the Secondary Market goes from here.

Remember, investors should not seek higher returns from buying and selling loans on the Bondora secondary market.

You can learn more about the Bondora Secondary Market here.


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