Credit rating of Mikro Kapital assets

Credit rating of Mikro Kapital assets

Some of the assets that are provided by Mikro Kapital do not have a credit rating from a third-party risk assessor – Coface. This happens when the borrower uses specific financial reporting standards, there is a lack of payment information, the borrower cannot be found in the public database of companies, or the borrower is a new company. Therefore, to provide more investment opportunities to Debitum Network users and compensate for the lack of the third-party risk assessment, Debitum Network will provide its own assessment for assets that do not have a rating.

All of the assets that do not have a third-party risk assessment will have the probability of default equal to 4.72% (D+) which represents the average non-performing loan ratio provided by the National Bank of Romania for the last three quarters (https://www.bnr.ro/Statistics-report-1124.aspx). Moreover, the amount of loans that are late for more than 90 days in the portfolio of Mikro Kapital is 0.69% and the historical default rate is 0.2%. These values serve as a benchmark representing the general risk of Mikro Kapital and Romanian credit market and will be updated every quarter. 

The score is adjusted based on the following criteria: loan size, days passed since the origination of a loan, the proportion of the loan outstanding on Mikro Kapital loan book, current loan to value, and remaining term. The following scores are assigned based on the aforementioned criteria:

For rating B- the asset should meet all the following requirements: 

  • loan size is less than 10,000 EUR
  • More than 50% of the term has passed OR more than 50% of the loan is repaid
  • current loan to value is below 75%
  • the remaining term is less than 360 days

For rating C the asset should meet all the following requirements: 

  • loan size is <20,000 EUR
  • >50% of the term has passed OR >50% of the loan is paid
  • current loan to value is below 75%
  • the remaining term is below 360 days

For rating D+ the asset should meet all the following requirements: 

  • loan size is <30,000 EUR
  • >33% of the term has passed OR >33% of the loan is paid
  • current loan to value is below 100%
  • the remaining term is below 540 days

For rating D- the asset should meet all the following requirements:

  • loan size is <50,000 EUR
  • >20% of the term has passed OR >20% of the loan is paid
  • current loan to value is below 100%
  • the remaining term is below 720 days

For rating E- 

  • Any other loan provided by Mikro Kapital Romania.

Assets rated according to this system will be shown as being rated by Debitum Network.


Disclaimer: Investments in financial products are subject to market risk and any investment should only be done with risk capital. The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

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