Bondora contracts with consumer credit agencies and uses publicly available data sources in the jurisdictions in which it operates to verify the identity and creditworthiness of potential borrowers. In addition, every loan application is verified through one or more credit bureaus (Bondora strives to make sure that alternatives are available). If access to such information is restricted or disrupted for any period of time, or the fees that Bondora pays for access to such information significantly increase, automatic customer identity and credit scoring checks may not be completed and its ability to process applications and issue loans may be curtailed.
Bondora Group also outsources IT services such as hosting and technical support to third-party providers. Details of the key IT outsourcing provider is provided in the article "IT risk"?
Credit and other information about borrowers that Bondora receives from third parties may be inaccurate or may not accurately reflect borrower creditworthiness, which may cause Bondora to price the Credit Assets inaccurately.
Moreover, Bondora Group generally outsources the collection of debt that is overdue by more than seven days to debt-collection agencies in the jurisdictions in which it operates. The loss of a key debt-collection agency relationship, or the failure of one of its core debt-collection agency partners, could inhibit or jeopardize Bondora Group's ability to recover delinquent debt. There is also the risk that Bondora Group may not be able to replace a strategic debt-collection agency partner in a timely manner or on favorable terms.
Any inability to maintain existing business relationships with local consumer credit agencies, IT services providers, debt-collection agencies, offline partners and other third-party service providers, or a failure by these third-party service providers to provide their services to Bondora Group, may have a material adverse effect on Bondora Group's business, financial condition, operational results or prospects, or cash flow. Bondora Group works with a number of outsourced services partners and endeavors to have contingency plans in place for all important services. To mitigate outsourcing risks, Bondora has adopted internal procedures that are applicable to outsourcing.