EstateGuru reports 14.3pc default rate
European peer-to-peer lender EstateGuru has reported a 14.3 per cent default rate on its loans to date, as it drives forward with its restructuring plans.
Last year, the platform cut its international workforce by more than a third and reduced its external development costs, with the aim of increasing profitability in the first quarter of 2023.
It also revealed in January that it has shelved its plans to expand into the UK and Spain and has temporarily halted new investment projects in Germany as it focuses on recoveries.
The firm’s latest loan portfolio overview details 306 outstanding loans, as of 27 March.
EstateGuru also reported that February saw its lowest loan origination volume in the last 12 months, at €6.5m (£5.7m).
Despite this, it reported the total historical financed loan amount since 2014 has reached €700m, out of which €406.3m has been repaid.
Estonia and Lithuania both accounted for a third of the total volume, followed by Finland and Latvia, which was the same in January.
Of February’s €6.1m worth of repayments, the average return was 7.5 per cent with a total of 67 loans (including stage loans) repaid.
Read more: EstateGuru sees property development slowdown in Baltics
The platform said in Latvia, €0.6m worth of principal and three loan projects have been recovered with positive returns to investors during the past month.
Loan project number 2501 was funded in mid-2018 with a default date one year later. Recovery was delayed due to a hostile borrower and the liquidation process but with the help of debt collection partner Conventus, the property was taken over and sold.
Two other projects, Marsa Gatve Bridge Loan and Zvaigznaja Bridge Loan, were funded in May of 2018 and defaulted in September of 2020. The assets were sold at auction, and part of the loans have been covered from the borrower’s other assets.
Read more: EstateGuru names new CEO amid strategy changes
EstateGuru announced earlier this month that it has raised capital from its founders, existing shareholders and other investors to safeguard the business against macroeconomic challenges and support its plans for growth.
It also secured a new funding line with Czech investment bank J&T Banka to fund real estate-backed loans in the Baltics.