The failure by the underlying borrowers to make repayments in accordance with the terms of a loan will have an adverse effect on the Issuer’s performance. The ability of the investor to earn income is almost entirely dependent upon such payments being made in a timely and complete manner. The investor will receive payments associated with a loan only if the underlying borrowers, sourced through Bondora, make payments on the relevant loan or, where a borrower defaults, the investor achieves recovery of the relevant loan.
Default rates in Finland, Estonia, Spain are relatively stable and are fully factored into consumer loan lending rates. Further, the investor may sell any loan at any time at a price equal to its book value, offering the investor an alternative source of generating income.