Figure 1 Performance of Note price and Long-Term Return Target
Update on alternative lending
After a very unusual beginning of 2020 the market for alternative lending is returning to a more normal situation under the summer holiday “slump”.
In August, interest payments were down from July as excepted. Cash flow, reflecting the normal seasonal pattern, always drops in August when borrowers are on holiday.
Current loans represented 77.2% of the value of the portfolio at the end of August, a decrease of 0.7%-points. At the same time loans more than 60+ days late increased to 2.5% of the value of the portfolio.
The loan originator that has sought protection under the COVID-19 legislation in Poland is negotiating a possible solution with Mintos. Quantrom P2P Lending has informed Mintos about our position and we await the outcome. In line with our cautious approach, we have taken an additional provision this month equal to 0.1% of the total portfolio.
Mintos has furthermore entered into an agreement with the Polish SME loan originator on which QP2PL has already taken a provision. The loan originator should start repaying outstanding amounts. However, we will only reverse our provisions when actual payments have been received on our account.
Quantrom P2P Lending has received payments on a number of property loans on which we have previously taken provisions. In total, just under 0.1% of total value of the portfolio in provisions has been reversed this month.
All in all, this gave a return of 0.48% for the month of August 2020.
Since inception, Quantrom P2P Lending has given a return of 30.76% and outperformed the long-term return target by 6.57%-points.
The portfolio at the end of August 2020 consisted of almost 7,800 loans. The weighted average interest rate on the portfolio is 11.02% with an average weighted maturity of 27.4 months.
The main exposure in value is still towards Car Loan which increased to 62% of the value of the portfolio at the end of the month.
Exposure towards property loans is at 25% of the value of the portfolio. At the end of August, personal loans represented 13%, while business loans were less than 1% of the value of the portfolio.
Figures 2-12 provide more details on the composition of the loan portfolio.
Quantrom Limited, Limerick