Each month we report on the performance of the defaulted loans recovery here at Bondora. As recently as November 8th we reported that all countries showed a significant increase in recoveries compared to the previous quarter totals for 2016.
Additionally, recoveries in each country for October period represented, at minimum, 2/3 value of the principal that defaulted. These are broad statistics covering the aggregate recoveries across all loans. Investors can keep updated on this information using the public “Public Statistics” page. The data represents the quarterly recoveries for any period the investor selects.
But what happens when an investor wants a focused view of how recoveries are performing within their personal holdings? In this post we will review the capabilities of the “Recovery Rate” tool in the private statistics page.
Track the recoveries from your defaulted loans
Investors seeking to monitor risk can use their personal recovery data to determine the trend of Bondora’s effectiveness in collecting from borrowers. The “Recovery rate” statistic is a useful tool to determine the expected capital loss on loans that default. It allows investors to reach as far back as 2009 while filtering by country, status and principal/interest.
On June 10th of 2015 we reported on our increased efforts to boost collection and recovery processes. Much of this project stems from using more legal recovery measures to reclaim overdue payments. The legal system requires long periods to yield results. Today, if you look a the annual recovery results in the public page you will notice a clear increase as a result of our aggressive efforts. Pre-legal attempts (i.e. collection agencies) have also been effective in our renewed efforts.
If an investor is dissatisfied with the recovery performance of their holdings, they may want to consider moving their holdings to higher rated borrowers. More risk averse lenders may be more comfortable working with borrowers that have a more dependable credit history. Remember, investors can also use the filtering option to closely examine which holdings are with borrowers that have a history of defaulted loans or a poor debt-to-equity ratio.