Loan book performance

At Squirrel, we believe in transparency and we aim to provide you with all the information and statistics you need to make informed decisions about investing with us.

Here's our open loan book so you can take a look what's inside.

With that said, please note that past performance does not guarantee similar performance in the future.

Man holding an iPad

Default rates

The risk of borrower default is one of the most significant risks for Investors in peer‐to‐peer consumer finance loans. Borrower default can occur for a variety of reasons including the borrower falling on hard times, death or serious illness and on occasion unscrupulous behaviour. Broader environmental factors such as recessions etc. can also influence the prevalence of borrower default.

We report a loan as being in default when:

  • It is no longer reasonably expected to be paid; and
  • It is no longer reported to investor(s) as due to them.

Once a loan gets to this stage, it is written off with the outstanding interest and principal repaid to the investor(s) in that loan via the Reserve Fund (so long as there are sufficient funds available in the Reserve Fund). Our debt collection processes will continue, usually via an external debt collection agency and may involve legal action, to seek a recovery on the written off amount from the borrower. Any recoveries made are paid into the Reserve Fund.

The values and rates shown in the tables and charts below are the life‐to‐date values as of 19 November 2019.

Loan origination, default and arrears statistics by risk grade

Approved borrowers on our Platform are allocated a risk grade based on their strength across our credit criteria. Their risk grade helps determine the level of reserve levy that applies to their loan and therefore contributes to the overall borrower interest rate.

The table below shows the performance of loans within each risk grade to date:

Risk Grade A B C D E Total 
Number of loans originated 346 935 765 196 30 2,272
Value of loans originated 7,672,821 17,149,040 11,582,013 2,394,135 353,876 39,151,885
Number of active loans1 167 472 401 92 14 1,146
Active loan balance 2,542,740 6,805,142 4,571,259 870,516 139,903 14,929,560
Number of loans in default 1 12 29 12 3 57
Value of loans in default (34,413) (140,666) (282,567) (72,088) (18,016) (547,751)
Recoveries on defaulted loans 34,413 2,321 4,230 6,794 6,673 54,431
Gross default rate 0.4% 0.8% 2.4% 3.0% 5.1% 1.4%
Net default rate2 0.0% 0.8% 2.4% 2.7% 3.2% 1.3%
Number of loans in arrears3 3 9 16 5 1 34
Value of loans in arrears 74,815 126,716 223,777 54,448 1,674 481,430
Arrears rate2 2.9% 1.9% 4.9% 6.3% 1.2% 3.2%

Loan origination, default and arrears statistics by secured and unsecured

Loans made via our Platform may be secured or unsecured (depending on product and loan value). Secured Loans are secured over an asset which provides some opportunity for recovery in the case of borrower default. Any security provided by the borrower will be held by the Squirrel P2P Trustee in accordance with the terms of the borrower agreement and the loan agreement. Where the loan is covered by a Reserve Fund, the security is taken for the benefit of the Squirrel P2P lending platform and the Reserve Fund and not for any investor individually.

The table below shows the performance of our secured and unsecured loans to date:

 

  Secured Unsecured Total % Secured
Number of loans originated 928 1,344 2,272 41%
Value of loans originated 21,936,694 17,215,191 39.151,885 56%
Number of active loans1 475 671 1,146 41%
Current balance of active loans  8,660,353 6,269,207 14,929,560 58%
Number of loans in default 9 48 57 16%
Value of loans in default (107,973) (439,778) (547,751) 20%
Recoveries on defaulted loans 43,895 10,536 54,431 81%
Gross default rate 0.5% 2.6% 1.4% n/a
Net default rate (after recoveries)2 0.3% 2.4% 1.2% n/a
Number of loans in arrears3 11 23 34 32%
Value of loans in arrears3 260,694 220,737 481,430 54%
Arrears rate3 3.0% 3.5% 3.2% n/a

Gross default rate by loan cohort

The chart to the right track’s the development of the gross default rate (i.e. excluding recoveries) for each loan cohort over time.

The table below contains the loan volumes and default and arrears statistics for each of our loan cohorts:

Loan cohort4 Loans originated Active balance3 Loans in default Defaults recovered Gross default rate Net default rate2 Loans in arrears3 Arrears rate
2015-H2 863,880 59,067 (17,264) - 2.0% 2.0% (16,548) 28.0%
2016-H1 3,175,633 228,759 (133,219) 4,939 4.2% 4.0% (42,127) 18.4%
2016-H2 3,479,230 302,447 (34,148) 6,673 1.0% 0.8% (39,943) 13.2%
2017-H1 4,805,525 854,040 (107,725) 5,200 2.1% 2.0% (20,896) 2.4%
2017-H2 6,502,837 1,569,701 (225,019) 34,752 3.5% 2.9% (166,604) 10.6%
2018-H1 5,095,458 1,900,967 (9.158) 2,867 0.2% 0.1% (49,042) 2.6%
2018-H2 5,238,064 1,767,185 - - 0.0% 0.0% (84,559) 4.8%
2019-H1 4,941,616 3,680,558 (26,218) - 0.5% 0.5% (54,493) 1.5%
2019-H2 5,049,642 4,566,835 - - 0.0% 0.0% (7,218) 0.2%
Total 39,151,885 14,929,560 (547,751) 54,431 1.4% 1.3% (481,430) 3.2%

 

1An active loan is one that has not been fully repaid or written off.
2Net default rate includes the written off loan amount less any recoveries made on those loans.
3Loans in arrears are defined as loans that are the equivalent of at least 1 monthly repayment behind schedule.
4A loan cohort is the group of loans that were originated within a specific six-month period..

The Reserve Fund helps protect against defaults

The Reserve Fund has been put in place help protect your investment in the event of a late borrower repayment or borrower default. It is funded by applying a reserve levy to the borrower interest rate which is aligned to their risk grade and corresponding probability of default.

Whilst the Reserve Fund has ensured that all investor principal and interest due has been repaid in full to date, the Reserve Fund is not an insurance product and we cannot guarantee or warrant that it will have sufficient funds available to enable you to be compensated in event of late borrower repayment or borrower default.

For further detail about how the Reserve Fund operates, including what would happen if the Reserve Fund was depleted, click here.

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