FUNDING CIRCLE - Defaulted Loans - Weekly 04/2016 to 03/201

Regardless of volume, which is soaring, defaults appear to be pretty stable until last summer, since when they have soared - probably as a result of stressed biusinesses and an enormous jump in loan origination.

Status of loans by month of acceptance

Thanks Cobi for some very informative graphs. I gather that they are all based on the number of loans, which is very interesting information, but can be misleading, as it looks at first glance as though long term capital losses are around the 10% mark. It would also be interesting to see the percentages based on values. E.g. if an amotizing loan defaults in its last month only a very small fraction off the capital is lost, and even that may be later recovered.

I'd like to point out that I'm not deriding what you've produced in any way. I find them very useful. My understanding is that they tend to belie the impression that I've picked up from various comments that the percentage of defaults has recently dramatically worsened. Perhaps the reason for this is that, even for well diversified portfolios, some investors will be unlucky. And, that these people are more likely to comment. Obviously a good diversification will reduce the probability of being unlucky, but can't eliminate it. I realize that, for the unlucky few, the poor results are real. However, if FC's stats are to be believed, no-one with a diversified portfolio has 'yet' lost money, and the vast majority have made a decent return. No doubt a few will even have been exceptionally lucky!

I wonder why FC don't produce these informative graphs on their stats pages?

Thanks again👍

...Because what goes down, or remains stable can sometimes INCREASE!

I agree that these graphs are very interesting. Especially given the comments of the "unlucky posters" (of which I am one so far!).