EstateGuru said it has recovered two late repayments, after its default rate continued to rise in June.
The European peer-to-peer lending platform saw its default rate on outstanding loans rise from 8.2 per cent in May, which was made up of 94 loans worth €12.9m (£11.1m), to 9.2 per cent in June, made up of 97 loans worth €14.9m.
EstateGuru said the default rate rose as a new market, Spain, was added to its ‘countries with at least one defaulted loan’ list.
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The platform said two loans in Latvia from the same borrower with the same collateral were successfully recovered last month (€200,000) and a Finnish bankruptcy estate defaulted loan will be recovered in the coming weeks as there were delays from the buyer’s side.
The platform funded €15.3m across 80 loans in June, down from €16.8m in May.
The majority of the projects came from Estonia and Germany which collectively comprised more than 50 per cent of the volume.
During June, €10.2m worth of loans were repaid to our investors and the average return on the repaid portfolio was 10.8 per cent.
“Ongoing legal disputes take most of our debt collectors’ and external partners’ time,” EstateGuru said in a blog post.
“Our internal debt collection system, from late payment gathering to enforcement, has been developed to be robust and efficient, but external bureaucracy makes the process of recovery slow. However, this doesn’t change our goal to reduce the default rate to below five per cent.”
Earlier this month EstateGuru announced it is planning its first projects in the UK after reporting a 180 per cent annual increase in loan volume during the second quarter of 2021 from €16.5m to €46.2m.