The latest in our monthly loan portfolio updates shows how EstateGuru performed in a time of crisis, and we are glad to report that the news is good.
In April of 2020, our investors financed €4,1M worth of loans.
Our borrowers showed resistance to economic conditions and paid back €3,1M worth of loan principals (please see the graph below). The return rate of repaid loans (fully repaid) in April of 2020 was 10,8%. EstateGuru investors have earned a total amount of €15,0M since 2014.
As of 22.05.2020, our outstanding portfolio’s distribution is as follows. Over 63% of loans are not related directly to real estate development and these are loans where our investors have supported SMEs in everyday business activities. Historically, our investors have financed a total of €147M worth of bridge and business loans with an average interest rate of 10,8% and an average principal loan amount of €0,16M
In April, the amount of defaulted loans remained, in general, the same (€5,6M) – we did recover 3 loans but also saw 2 loans go into default. In May, our Latvian debt collection partner recovered their first case for our investors and other loans will follow.
We also haven’t changed our forecast for the coming months in other countries – we expect to see many recoveries happening and we are currently finalizing the sales of the collateral assets. Consequently, the default rate will remain below 10%.
A positive sign is that, in the Baltics, borders have been opened and governments have eased restrictions. If the virus is contained, we can expect a quick recovery in Autumn. This will have a positive effect on our sales volumes, repayments and recoveries. During the last 15 days, we have seen less loan prolongation applications which also is a sign of stabilization of the real estate market.
We will keep you informed about the credit portfolio quality on a monthly basis.