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The traditional yearly update on the loan portfolio is ready!
The overall picture is very positive as the risk is well below the forecast and the return still above expectations.
1. Average return on the whole portfolio
The portfolio continues to behave better than initially forecasted. The average return since the start of the platform is 6.2%.
It’s very stable as the previous year’s value was 6.3%.
We should anticipate an increase of the return as we have raised the rates of the newly financed loans, especially for the longest durations.
2. Net profit
The accumulated profit has surpassed 2 million BGN.
The “loss from debt sales” remain a tiny fraction of the earned interest. This shows how stable is Klear P2P lending model targeting prime borrowers.
3. Investors by level return
Most of the investors have a return between 6% and 7%.
4. Return vs number of loans invested in (for investors not actively trading on the secondary market)
Beyond a diversification level of 200 loans, the return is very stable oscillating slightly around 6%.
As you can see, only 1 investor had a negative return, and the obvious reason is almost no diversification.
Nota bene:
To consider if an investor is actively trading on the secondary market, we look at his purchases and sales on the secondary market, more precisely if he’s buying or selling at a discount/premium quite different from the recommended KIP. If the difference between the actual and recommended prices represents more than 10% of the earned interest, he is classified as actively trading on the secondary market.
Besides, we count only investors who have earned at least 1 BGN of interest.
5. Return vs number of loans invested in (for investors actively trading on the secondary market)
Transacting on the secondary market offers opportunities to earn up to 10% but it is riskier. There is higher volatility when transacting actively on the secondary market.
6. Time to sell
On average, since the beginning of the platform, an investor can sell more than 93% of his portfolio within 5 days.
These average numbers have not changed much compared to the last year. Fast access to liquidity is important for our investors and we are very happy to see such a great and stable performance over the years.
7. Risk levels by vintage of production
Short-term indicator R2-6
It’s a short-term indicator to assess at an early stage the quality of a new vintage.
We look at loans financed having reached more than 30 days delay in the first 6 months of their life (among all loans from a vintage with at least 6 months of life)*.
| Period | Financed* | Incidents | R2-6 % |
|---|---|---|---|
| 2016 S2 | 77 | 3 | 3.9% |
| 2017 S1 | 168 | 3 | 1.8% |
| 2017 S2 | 173 | 4 | 2.3% |
| 2018 S1 | 183 | 0 | 0.0% |
| 2018 S2 | 188 | 1 | 0.5% |
| 2019 S1 | 213 | 5 | 2.3% |
| 2019 S2 | 259 | 4 | 1.5% |
| 2020 S1 | 175 | 2 | 1.1% |
| 2020 S2 | 203 | 2 | 1.0% |
| 2021 S1 | 212 | 3 | 1.4% |
| 2021 S2 | 257 | 0 | 0.0% |
| 2022 S1 | 371 | 9 | 2.4% |
| 2022 S2 | 288 | 5 | 1.7% |
| 2023 S1 | 153 | 3 | 2.0% |
| ALL | 2 920 | 44 | 1.5% |
The average value of 1.5% is slightly higher last year. Loans originated in the last 2 semesters are with a slightly higher risk than the average.
How to read it:
For example, among all the loans financed in the first semester of 2023, 153 had at least 6 months of history and among them 3 reached at least 30 days delay (equivalent to 2 installments in delay), which is 2%.
1 Year risk indicator R3-12
We look at loans having reached more than 60 days delay (equivalent to 3 installments in delay) in the first 12 months of their life, among all loans from a vintage with at least 12 months of life.
| Period | Financed* | Incidents | R3-12 % |
|---|---|---|---|
| 2016 S2 | 77 | 3 | 3.9% |
| 2017 S1 | 168 | 6 | 3.6% |
| 2017 S2 | 173 | 9 | 5.2% |
| 2018 S1 | 183 | 3 | 1.6% |
| 2018 S2 | 188 | 2 | 1.1% |
| 2019 S1 | 213 | 5 | 2.3% |
| 2019 S2 | 259 | 7 | 2.7% |
| 2020 S1 | 175 | 3 | 1.7% |
| 2020 S2 | 203 | 4 | 2.0% |
| 2021 S1 | 212 | 3 | 1.4% |
| 2021 S2 | 257 | 0 | 0.0% |
| 2022 S1 | 371 | 7 | 1.9% |
| 2022 S2 | 191 | 1 | 0.5% |
| ALL | 2 670 | 53 | 2.0% |
The loans financed in 2022 are of better quality than the average.
Conclusion
The risk indicators are excellent.
Yes, we call that investment because there are risks and we don’t hide them.
But, with such stable returns over 7 years and a fast option to sell, that P2P lending option with Klear sounds much better than a deposit in a bank.
