In July, Estonian loan originations totaled €3,037,495, rising progressively from June’s €2,010,847. This continues the see-sawing trend we’ve noted with Estonian loan originations over the last few months. However, the growth on-the-month far exceed previous increases. Loan originations regained magnificently with a 51.1% increase after an 11.4% decrease last month. This is the first time loan originations have been valued above €3M since April, indicating good things to come.
The interest rate for Estonian loans is slowly making its way down to pre-crisis levels with a slight decrease to 34.9%. This is the second consecutive month that the interest rate has showed a decline.
Loan originations are still only taking place in Estonia for the foreseeable future. The decision to possibly restart Finnish and Spanish loans will be reviewed at the end of September.
Tremendous growth in Estonian loans
Due to the magnificent growth in loans, there was an increase across all the rating categories and very little change regarding the shares per rating. The interest rates showed little changes across all the various ratings. C and D-rated loans declined with 0.15% and 0.4%, respectively. Whereas B-rated loans rose with 0.7% and E-rated loans climbed with 0.41%.
Loan amounts and duration continue to grow
The growth trend continues on as the loan amounts increase significantly for the 3rd month in a row. On-the-month we saw a 12.1% increase.
Loan durations mirror this upward trend. For the 3nd consecutive month we’re seeing an increase in loan durations. This month, it has lengthened to 56 months—4 months longer than in June.
60-month loans gained even more popularity than usual, with 929 lenders choosing this long-term option—up from 591 lenders last month. We also saw an uptake in short-term loans, with 35 loans in total being issued for the 6, 9, and 12-month loan periods.
Average age and income remains fairly consistent
The age of the average Estonian borrower remains the same as it has been from March, going back and forth between 38 and 39 years old. June and July both have 38 years as the average age of the Estonian borrower.
For the first time since May, we’ve seen an increase in the average net income, rising from €1,228 in June to €1,312 in July. This is the 3rd highest average measured for Estonian borrowers in 2020.
High school education make up bulk of borrowers
Estonian borrowers with a high school education remain the biggest percentage of borrowers, accounting for 42.5% of the borrower landscape—a 6.3% decrease from June (nearly exactly the same as the 6.2% increase we saw last month). This decrease might be due to the higher percentage of university graduates, which rose by 4.5% to make up 18.3% of the loan share.
Mid-long term employees on the rise
The employment duration figures showed little change during July. This month, 3 of the categories saw an increase in percentile growth. In contrast, the Retired and Other categories saw decreases. Borrowers who have been employed for up to 5 years still hold the biggest share with 38.9%.
Home ownership statistics remain stable
The statistics for home ownership status of Estonian borrowers remains more or less the same as it has for the last couple of months. The majority of borrowers remain homeowners (43.9%), the rate for tenants’ declines slightly to 18.8%, while living with their parents (16.1%) make up the 3rd biggest category. Although it’s the smallest portion of the home ownership categories, those Living in a council house rose considerably to 1.2%
Verification numbers continues its ascent, rising from 89.7% in June to 91.45 in July. This is the highest verification percentile rating achieved for Estonia in 2020 to date. Only 8.6% of Estonian borrowers are unverified.
Fantastic growth in July
July marked a month of considerable growth for loan originations, which is a welcome increase. Facilitating growth, whilst staying as consistent and stable as possible remains our focus. Bondora continues to provide investors with trusted opportunities for investment, even during uncertain times.
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