EstateGuru saw a rise in investment and a drop in its default rate in August, before registering its first principal capital loss for lenders at the beginning of September.
Last month, the European peer-to-peer lending platform’s lenders backed 84 loans worth €17m (£14.46m), up from 70 projects worth €14.3m in July. This was led by the top-performing markets of Estonia and Germany which saw loan volumes of €5.3m and €6.9m, respectively.
€12.6m worth of loans were repaid during August at an average return of 10.8 per cent, while the default rate continued its downward trend. The platform, which raised €5.8m from its series A funding round in September, saw a €400,000 partial repayment of an Estonian project, with the same amount expected by the end of the year to fully recover the loan, and the full repayment of another small Estonian loan.
Then at the beginning of September, EstateGuru registered its investors’ first principal capital loss with €10,000 in total write-off of principal. The loss was made on a €130,000 development loan in Estonia which was declared defaulted in January 2019. The platform sold the collaterals from the bankrupt estate in October of 2020.
EstateGuru said that 302 investors with an average investment of €430 received a loss on their investment due to the various costs related to the bankruptcy process, including taxes, bankruptcy administrator’s fee and statutory partial distribution of proceeds with other creditors.
The amount repaid to the investor accounts is 90.9 per cent of the initial principal amount while the platform’s debt collection partner is collecting the remaining claim from the suretyship giver.
EstateGuru said it has made progress in Sweden and Finland where it has received offers to sell the claims of three defaulted projects. The platform said negotiations are ongoing and it is planning to close the transactions hopefully by mid-October.