How predictable are the default rates?
The default history for Bondora-originated loans is limited; actual defaults may be greater than indicated by historical data, and the timing of defaults may vary significantly from past experience. The methodology and assumptions used by Bondora to present the historical default experience may not be sufficiently prudent and, accordingly, may not accurately predict loan default timelines. As a result, the investor might invest in loans that have a higher default risk than expected, which may result in increased losses to the investor.
Bondora's dataset on Estonian, Finnish and Spanish borrowers is up-to-date and based on years of data. Moreover, all these loan countries have been through at least one recession during the time Bondora has operated in these countries, which has served as a test of loan performance under conditions of economic distress.