At the beginning of each month we look back to the previous month. Everything looks quite normal, money is nearly fully invested, share of loans running more than one year raised meanwhile to 10% and the total default rate is now 18,6%
Isn’t the total default rate too high? Of course i would be happy to have lesser defaults. But look how the defaults are shared:
- 6,9% of defaults came out of loans which weren’t selected by AI
- 11,7% of defaults came out of loans which were selected by AI
In the Portfolio Overview from July 2018 I showed which default rate I’m expecting. With my current risk settings, investing 55% of my money into risk class D and higher, I’m still relaxed with the current default rate. Relaxed? Let’s have a look into the last table Defaults of the below Dashboard picture: Bondora and Real. On each new loan loan Bondora API delivers the default probability within the first year – ProbabilityOfDefault. In the Demo Portfolio the value is 23,8%. With my AI defaults of 11,7% I’m still below the half of the Bondora calculated value. Time will show if the value remains below the Bondora prediction.
