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How are recovery rates measured?

We calculate the recovery rate by comparing the actual principal cash flow (net write-offs) that occurred after the default with principal cash flow that we would have expected from the loan if it had paid according to the agreed schedule. This allows us to determine the expected capital loss on loans that default.

Data is aggregated to larger cohorts and recent data are excluded as otherwise outliers will skew the results too much (e.g. 1 customer repaying the full amount after default at once). On the Bondora level this means excluding the last three months of defaults and using country based quarterly cohorts. Data on individual portfolios should likely be viewed on a higher level either using yearly country-based cohorts or simply quarterly cohorts across all countries.

Get regular updates on recovery performance on our blog in monthly blog posts.

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* Capital at risk. Investments made with Bondora are not guaranteed, nor is the preservation of value invested guaranteed. Please note that the yield achieved in past periods does not guarantee the rate of return in future periods. The yield of the Go & Grow Unlimited tier is up to 4% p.a. The yield for Go & Grow is up to 6.75% p.a. Before deciding to invest, please review our risk statement and consult with a financial advisor if necessary.