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Post by justdabbling on Apr 20, 2017 7:49:36 GMT
I noticed that the proportion of farm loans in the defaults is higher than the overall loan book. Of the 13 defaulted loans 5 are for farms if you include the barns. Looking and the near defaults with 'IA' status there are 2 farms out of 8 loans. So 7 out of 21 or a third of the dodgy loans are farms.
Looking at the repaid loans there are 94 of which only 8 are for farms, four of which are actually one large piece of farmland, which is fewer than a tenth. It could be said that there have been only 5 repaid farm loans.
Any statisticians out there?
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lobster
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Post by lobster on Apr 20, 2017 8:00:53 GMT
I noticed that the proportion of farm loans in the defaults is higher than the overall loan book. Of the 13 defaulted loans 5 are for farms if you include the barns. Looking and the near defaults with 'IA' status there are 2 farms out of 8 loans. So 7 out of 21 or a third of the dodgy loans are farms. Looking at the repaid loans there are 94 of which only 8 are for farms, four of which are actually one large piece of farmland, which is fewer than a tenth. It could be said that there have been only 5 repaid farm loans. Any statisticians out there? That's a very interesting observation. I'm no statistician, but I'm pretty sure that the sample size (ie. total number of loans analysed) is quite low, which doesn't mean that your analysis is worthless, just that it's statistically less reliable. So an obvious extension of your research would be for a similar analysis to be carried out on other P2P platforms. Anyone out there feel up to the task ? 
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Liz
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Post by Liz on Apr 20, 2017 8:06:27 GMT
I noticed that the proportion of farm loans in the defaults is higher than the overall loan book. Of the 13 defaulted loans 5 are for farms if you include the barns. Looking and the near defaults with 'IA' status there are 2 farms out of 8 loans. So 7 out of 21 or a third of the dodgy loans are farms. Looking at the repaid loans there are 94 of which only 8 are for farms, four of which are actually one large piece of farmland, which is fewer than a tenth. It could be said that there have been only 5 repaid farm loans. Any statisticians out there? More risky? Yes! They must be hard to sell and the selling price is uncertain.
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Post by bracknellboy on Apr 20, 2017 8:11:02 GMT
a few years ago when I was 'active' on FC, I did regularly attempt to do some fairly basic analysis of performance by sector, (not at all rigorous as that would have required me to dust off books I hadn't opened up for a couple o more decades). It might however be a good place to go take a look given that FCs loan book does classify (or at least used to) by sector. My attempts to get insight were before property started to dominate.
At the time, if I recall correctly, agriculture (or whatever was their closest equivalent) simply had two few loans to be statistically significant. That is probably not the case now. However the trend over time was it did seem to be on the higher risk side and did not appear to be showing signs of reverting to the mean. So while it was not large enough sample to be significant, it did prompt me to steer clear of that sector (I do recall lending to an SME where the security was farmland, but that is a different issue).
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GeorgeT
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Post by GeorgeT on Apr 20, 2017 10:16:13 GMT
Agricultural land values have performed well in recent years and outperformed other land values. On the whole Ag land values are not as volatile as other sectors.
Isn't part of the problem here that a certain borrower has been involved.
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Post by justdabbling on Apr 20, 2017 13:03:31 GMT
PBL064 was not included as a farm as it is a tenanted office block, but of course it had agricultural connections so including that one would make farms look more risky.
What you say about agricultural land is interesting and resonates with the impression I had.
I don't think I will be putting much into farm loans and definitely not any below 12%.
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fp
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Post by fp on Apr 20, 2017 17:14:26 GMT
It isn't the farms which are a problem... its the people borrowing against them.
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