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Calculated fields & Tools Used

Fico Category

Delinquency Category

PTI Category

Fico Behavior

Based on change in their Origination FICO score and Adjust FICO Score borrowers have been divided into Increased, Decreased and No Changed in FICO Score category

Based on PTI Ratio, the borrowers have been categorized into Healthy, Safe Zone, Risky and Unhealthy Groups

Based on the recent delinquency days, the borrowers have been categorized in 4 classes having 0-30 DD, 31-60 DD, 61-90DD and >90 DD

Based on their Adjusted FICO Scores, the borrowers have been categorized into Poor, Fair, Good, Very Good and Excellent Categories

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Overview

Original Repayment Amount= Total Amount Paid+ NFE + Unearned income balance + Origination Fees

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Balance per GL = NFE + Unearned income balance + Origination Fees

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Overall, 6377 unique loans were given and data for the same was made available to us

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Reporting date was from 1st Jun 2021 to 1st Jun 2022

8 type of business corporation were given loan for a maximum period of 15 Months

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Details of FICO Score of the borrower was provided at the time of origination and every reporting date

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Dashboard 

FICO Score 

Category

<580

Poor

580-669

Fair

670-739

Good

740-799

Very Good

800-850

Excellent

PTI 

Category

<=0.15

Healthy

>0.15 & <=0.25

Safe Zone

>0.25 & <0.35

Risky

>=0.35

Unhealthy

  • 'Construction-General'  as an Industry and 'Limited Liability Company' as Business Structure has the highest contribution in the remaining loan pool that is to be paid
  • Majority of the loan pool lies in 'good', 'fair' and 'very good' category which shows low default chances of the loan
  • The Balance per GL on the last reporting date sums up to 329.47M

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FICO Score and PTI Ratio Analysis 

  • Change in FICO value from origination is categorized as increased, decreases and neutral to track the performance of pool

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  • For the majority of the pool FICO value remained the same

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  • Values for the count and amount of increased and decreased FICO almost remained the same

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  • More than 90% of the remaining loan pool lies in the category of 'Healthy' and 'Safe zone' PTI category

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Delinquency Category

Balance Per GL

0-30 days

291,273,105.52

31-60 days

5,094,897.30

61-90 days

31,334,277.26

90+ days

1,769,054.82

Total

329,471,334.90

  • Delinquency days are categorized into four parts
  • 90+ delinquency days borrowers are considered as defaulters
  • 88.41 % of the loans fall in the category of 0-30 days which is assumed to not default

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  • Remaining Profit of the pool (no default) = NFE – Payment => (273.3M - 224.64M = 48.66M)
  • Profit (considering defaulters)= 48.6M - 1.77M => 46.83M
  • Considering Covid impact, there are high chances of borrowers with 61-90 delinquent days to default. The profit now will be = 15.5M 

Delinquency Days

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Payment Pattern

  • Out of expected €102M in last 60 days from borrowers, the received amount is €100M

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  • Also, almost 90% of the last payment amount has cleared that substantiates the intent of borrowers towards repaying the loans

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  • All the business structures have paid close to 50% of their original repayment amount, that shows consistency in their payments

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Conclusion

Even if we consider that borrower with >60 delinquent days will default, and rest will pay, the pool will still be profitable

For majority of the borrowers there is no impact on their FICO score and that shows that they are showing an intent to repay

Almost €320 million of ledger balance is with “healthy and safe zone” PTI category borrowers, hence there are high chances of repayment

86.05% of overall general ledger amount is with excellent, very good and good category borrowers, and 88.41% of the repayment will be made by the borrowers having 0-30 delinquent days. It is a good indicator to consider that lent out amount is safe

The last 60 days cleared payment is close to 90%, which is indeed a good indicator of repayment

All the business structures are consistently paying their loans and everyone of them have already paid close to 50% of their original repayment amount

Based on our analysis, this investment opportunity is very good for UAF, and they can acquire this unsecured loan pool and diversify their investment portfolio for the following main reasons:

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