After months and years of announcements and waiting Funding Circle Germany yesterday published loan book performance figures. Data reported is on all loans since launch on March 30th, 2014 (at that time Zencap) and as of June 30th, 2017. In total there were 920 loans.
Total loan origination volume 66,560,800 EUR 100%
Repaid loan volume 26,859,284 EUR 40.35%
Loan volume in default (more than 90 days overdue): 3,988,632 EUR 5.99%
Outstanding principal: 35,712,885 EUR 53.65%
Total interest paid to investors: 4,578,552 EUR
The outstanding principal of 35,712,885 EUR (100%) is further categorized:
Current: 33,293,583 EUR 93.23%
Loans that are less than 30 days overdue: 1,664,005 EUR 4,66%
Loans that are 30 to 60 days overdue: 421,902 EUR 1.18%
Loans that are 60 to 90 days overdue: 333,394 EUR 0.93%
Average weighted interest rate: 8.41%
I would have linked to the source here, but Funding Circle pulled the figures within hours after publication and the page now returns a 404 error (I did save a screen shot before they were pulled). I reached out via email to Funding Circle asking for the reasons, but have not received a reply up to the point of publication of this article.
Update: I received a reply from Funding Circle stating that the figures were not correct and did not match Funding Circle’s global reporting format. An example given was that payments made by defaulted loans were omitted. Funding Circle strives to publish the corrected figures asap.
2nd update July 13th: Funding Circle has now published updated figures in changes format. They are online here.
Phrasing it differently one could say that 9.6% (6,4M/66,6) of all issued loans are currently overdue or in default.
In my view the figures give a very bleak – but correct picture of the state of Funding Circle Germany’s loan book. Overdue and default figures are high. With nearly 6% of the loan amount in default and more than another 6% of the remaining loans overdue, there is a very high probability that many investors will incur (after tax) losses. Usually German investors cannot offset default losses against interest earned.
I invested into 27 loans with 100 EUR each (the minimum bid). I stopped investing already in February 2015, after only 10 month, when it became clear to me that Funding Circle Germany had higher overdue figures than expected. However as there is no secondary market at Funding Circle Germany I was stuck with the loans until maturity.
Of my 27 loans the status today is:
– 22 repaid
– 4 overdue (2 of them for 256 days !)
– 1 default (in collection)
I already received back 2,303 EUR of the principal, so there is only about 15% of my investment amount still outstanding. I might get away with a return around zero, as my defaults + overdues are still lower than the interest paid, but it will be close as I have to pay taxes on the full interest earned regardless of defaults. My dashboard still claims 4.12% yield for my portfolio, which does not reflect reality as I see it. The only chance for that to happen would be full recovery of defaults and overdues, which is an unlikely scenario.
Investor sentiment towards Funding Circle Germany seems to have turned mostly negative to sarcastic in the past two years if you look at the massive critic on the Funding Circle forum at P2P-Kredite.com. Funding Circle Germany no longer publishes statistics regularly on new monthly loan volumes.