The Bondora Forum Closes Today.

Given latest lending stats (link) I wonder whether it is time for the mods to demote Bondora from the main page here and promote Mintos instead?

I would certainly like to see that.   We get lots of info and feedback from the Mintos CEO Martins, whereas Bondora never bother to post anything here and seem to be losing volume.

The reason the Bondora board receives so many posts is the amount of people complaining about them.

Ah i am sorry about that, but theres just too many reasons to complain about bondora ,the experience with them was appaling . So yes it gives the board more traffic and deny visibility to  some honest platforms . First post i made on this board was about default rates, and those have not improved despite bondora trying their best to hide them.
And here am i going at it again

Hello Higher Powers

If you do decide to jiggle the boards around can I suggest you make a main board for €uroland platforms and work from there please?

I cant tell, i have no recent loans since months. I completely stopped investing when they introduced the new portfolio to brute force the new markets unto unsuspecting customers. So maybe the new loans are wonderful , who knows, but i dont see any reasons to give them the benefits of the doubt.

All i got left is some old estonian loans still paying around 1000 euros, i only managed to sell the best ones. 1400 euro  mix of estonian , spanish and slovakian and finnish  loans in 60+ defaults. However here's what my main page looks like:






So i guess they think  i am completely retarded....16.51% return with more than half the portfolio made of 60+ default and no recoveryto be seen , sure.. lets believe that.

Well no recovery.. to be fair  I recovered a few dozens of euros on the estonian ones and still nothing on 2year old spanish defaulted. A few reimbursed nothing at all and are still at stage 1. All of this, its just a complete joke.

No, it's not remotely close to being true. They mislead investors by making these assumptions in their calculations:

1. All future capital payments for all defaulted or late loans will be made, none of this capital will be lost to default.
2. No more loans will become late or default, so all future capital and interest payments on these will be made.
3. All overdue payments won't be made.
4. They also credit defaulted payments to capital first, as they should, but this further flatters the recovery appearance.
5. Possible recovery of overdue payments is also ignored, this is a factor that understates the return.

In the early years of a portfolio most of the capital owed on a defaulted loan will be in future payments. Those payments have not yet become due in the way Bondora calculates, even though they are 100% due in the loan contracts. So Bondora ignores that part of the defaulted balance and pretends that amount of default loss hasn't really happened.

The result is that in the early years of a portfolio Bondora will tell an investor that their portfolio is doing better than it is by ignoring the true level of default loses that are likely to be experienced.

Bondora has its model used for ratings and could apply that to anticipated recover to discount the future value of defaulted loan capital payments and work out an estimate of the current loss but they choose not to do this. No surprise: what they do will mislead investors into continuing to invest by presenting an overly positive picture. The more time the investor does new lending, the longer it will take for the true picture to become visible because the new loans will have the same effects. But eventually all of those future not going to happen payments for defaulted loans will arrive and the performance will gradually drop. Whether it stays positive or becomes negative depends on the balance between interest rates, defaults and recoveries.

Bondora is correct that most people who use simple XIRR returns are calculating numbers that are more pessimistic than likely reality, by doing things like assuming 100% loss of defaulted capital. But the people who do this know about that and just want a current picture, so that their future is likely to be better, not worse. It's a conservative measure, while the Bondora one is impossibly optimistic. I know that I'm undervaluing my own portfolio by using current values, even by using current values and allowance for recoveries. That's in part because I have a mostly 60 month loan portfolio with something like 2--3 years of average loan length left and interest rate average of about 27%. With all loans now more than a year old, so I have passed the higher default rate period. This means that from the combination of future interest and recoveries I can expect a gradually improving picture for my overall returns. I could work out the future value of those and future estimates for new defaults and come up with some net present value for the portfolio if I wanted to but what I have is good enough for me: a conservative portfolio valuation.