BitLendingClub Deep Insight Series: Defaults By Country

BitLendingClub was founded on two core values in mind: be as transparent as possible (resources permitting) and only collect fees from the loan repayments. These core values differentiate us from any other lending marketplace out there and we still abide by them today. The unique thing about BitLenidngClub is that when a borrower defaults on a loan, we don’t make money at the expense of our lenders. Having your incentives properly aligned is a strong driving force to lower defaults, and lowering defaults is always an ongoing effort at BitLendingClub.

Our efforts in underwriting have been extremely successful: we’ve managed to lower defaults by 50% in the past 2 months. Our defaults went from an average of 17% in the months before March to 7.7%:

However, there is always room for improvement. One of the areas our lenders have always wanted to explore is the detailed statistics on loan origination and defaults by country. In this post, we will explore what are some safe countries to invest in and what are some risky ones.

Loan Volume By Country

The loan volume by country is already available in our statistics page, but for reference purposes I’m going to include it again.

Default By Country

We calculated the defaults from the loan volumes: i.e. the total amount of loans in each country and the amount of defaulted loans. Please note we count late loans as defaults too. We feel like this is the most accurate way to calculate defaults, because it directly translates into the loss rate for the lenders. For those who want to calculate the loans by the number of loans which are currently late/default, we’ve conveniently included all of the detailed statistics for each country at the end of this blog post.

Please note that the sample size for Vietnam and Nigeria was too small (2 loans and 1 loan, respectively), so we didn’t include them in our default statistics. Both countries have a default rate of 100%, but the sample size was too small and it made the countries stand out, despite having almost no loan being originated there.

The Naughty List

The naughty list consists of the top 10 countries with the worst default rates:

Philippines 56.38%
Latvia 49.48%
Iran 39.85%
Ghana 39.32%
Moldova 37.25%
Lithuania 34.15%
Jamaica 31.23%
Colombia 31.18%
Indonesia 29.56%
Thailand 28.12%
Netherlands 27.81%
Singapore 27.50%

We have to say that the ones that stand out the most are Philippines, Indonesia, Thailand and Singapore. We’ve had a large number of loans from those countries and the default rate is quite high, this makes the statistics quite reliable. While there are good borrowers from those countries, it seems that there is a pretty high risk of default and our lenders should be very careful when lending there. Netherlands is a bit of an odd ball, because in the early days of BitLendingClub there was a scammer from there that was responsible for most of the defaults.  We don’t get many borrowers from the Netherlands, Ghana, Moldova, Lithuania and Jamaica, so we welcome any good borrowers from those countries to improve the reputation of their motherland!

The Good List

Ukraine 4.11%
South Africa 4.09%
Portugal 3.21%
Chile 3.10%
Australia 3.07%
Italy 0.97%
Venezuela 0.47%
Mexico 0.01%
Kuwait 0.00%
Switzerland 0.00%
Ecuador 0.00%

We tried to pick countries which are not at the very bottom of the list by loan volumes and at the same time they have low risks of default. While the loans from those countries are few and far in between, it does seem that at least for now they’ve been a relatively safe bet. Of course, all of this can change if some bad players end up defaulting on large loans. As always, invest with care and perform your due diligence carefully!

The Big Players

United States 22.84%
Brazil 8.26%
Australia 3.07%
New Zealand 22.14%
Venezuela 0.47%
United Kingdom 9.77%
India 7.25%
Canada 10.73%
Spain 15.26%
France 13.62%

These are the top 10 countries by loan volume and their respective default rates. As we can see, Brazil, Australia, Venezuela and India are the shining stars on the list: all of the countries have default rates below 10%. Kudos to the big boys!

Full Statistics

Finally, here are all of the statistics per country.

Country Default Rate Num Loans USD Total Num LnD Loans USD LnD
Vietnam 100.00% 2 $232.72 2 $232.72
Nigeria 100.00% 1 $11.24 1 $11.24
Philippines 56.38% 19 $4,213.18 5 $2,375.38
Latvia 49.48% 23 $5,367.28 5 $2,655.84
Iran 39.85% 30 $11,034.92 4 $4,396.87
Ghana 39.32% 10 $1,191.12 1 $468.38
Moldova 37.25% 16 $16,009.23 3 $5,964.08
Lithuania 34.15% 5 $665.10 1 $227.12
Jamaica 31.23% 10 $993.32 1 $310.19
Colombia 31.18% 66 $13,224.57 8 $4,122.76
Indonesia 29.56% 197 $34,310.58 24 $10,143.73
Thailand 28.12% 56 $54,516.82 6 $15,327.61
Netherlands 27.81% 26 $6,602.10 3 $1,835.84
Singapore 27.50% 36 $22,656.11 1 $6,230.60
Argentina 24.68% 39 $83,874.49 6 $20,704.06
Romania 23.53% 115 $50,406.43 15 $11,858.22
Hungary 23.02% 126 $60,784.13 12 $13,990.31
United States 22.84% 1451 $1,276,190.19 137 $291,512.52
New Zealand 22.14% 125 $314,147.31 19 $69,549.94
Russian Federation 18.39% 34 $13,598.76 5 $2,501.38
Morocco 17.64% 8 $3,864.39 1 $681.59
Croatia 16.04% 25 $11,885.78 3 $1,906.05
Spain 15.26% 66 $101,597.30 10 $15,504.97
Estonia 13.77% 5 $1,671.89 1 $230.28
France 13.62% 122 $92,384.59 5 $12,582.90
Ireland 13.18% 37 $51,328.73 9 $6,763.13
Turkey 12.55% 195 $73,594.05 17 $9,239.37
Belgium 11.99% 15 $3,661.56 3 $439.15
Canada 10.73% 206 $129,717.24 11 $13,912.21
Greece 10.39% 47 $77,751.28 2 $8,074.63
United Kingdom 9.77% 376 $169,934.69 32 $16,610.87
Malaysia 9.27% 23 $4,344.76 2 $402.56
Poland 9.13% 16 $4,629.59 3 $422.80
Czech Republic 8.80% 74 $24,505.37 2 $2,157.36
Serbia 8.41% 15 $4,134.00 1 $347.68
Kenya 8.36% 31 $4,820.74 3 $403.18
Brazil 8.26% 324 $411,754.90 29 $33,993.05
Finland 7.43% 12 $1,670.41 1 $124.15
India 7.25% 288 $133,334.49 11 $9,665.04
Sweden 6.90% 24 $9,773.14 1 $674.32
Hong Kong 5.08% 10 $6,903.73 1 $350.71
Denmark 5.03% 12 $3,985.93 1 $200.31
Germany 4.13% 71 $28,741.06 3 $1,187.29
Ukraine 4.11% 20 $11,559.51 2 $475.14
South Africa 4.09% 19 $14,459.97 1 $591.58
Bulgaria 3.22% 151 $7,819.26 1 $251.52
Portugal 3.21% 20 $10,459.26 1 $336.25
Chile 3.10% 11 $7,110.02 1 $220.20
Australia 3.07% 180 $359,403.71 7 $11,022.66
Italy 0.97% 54 $69,319.98 2 $670.30
Venezuela 0.47% 373 $189,365.97 2 $889.38
Mexico 0.01% 23 $44,831.27 1 $6.36
Kuwait 0.00% 19 $43,241.49 0 $0.00
Switzerland 0.00% 88 $21,518.47 0 $0.00
Ecuador 0.00% 33 $16,491.25 0 $0.00
Panama 0.00% 18 $10,717.10 0 $0.00
Slovenia 0.00% 5 $6,040.94 0 $0.00
Bolivia 0.00% 7 $3,627.58 0 $0.00
Norway 0.00% 4 $2,738.70 0 $0.00
Paraguay 0.00% 18 $2,626.60 0 $0.00
Luxembourg 0.00% 8 $1,030.58 0 $0.00
Cayman Islands 0.00% 3 $650.87 0 $0.00
United Arab Emirates 0.00% 3 $611.91 0 $0.00
Pakistan 0.00% 7 $393.88 0 $0.00
Japan 0.00% 2 $368.60 0 $0.00
Belarus 0.00% 2 $209.84 0 $0.00
Bosnia and Herzegovina 0.00% 8 $193.71 0 $0.00
Saudi Arabia 0.00% 2 $100.91 0 $0.00
Albania 0.00% 2 $96.86 0 $0.00
Peru 0.00% 2 $67.55 0 $0.00
Gibraltar 0.00% 1 $23.98 0 $0.00
Sri Lanka 0.00% 4 $0.64 0 $0.00
Dominican Republic 0.00% 1 $0.23 0 $0.00

 

Borrowers Per Country

Country Num Total Borrowers Num Default Borrowers Percent
United States 295 94 31.86%
United Kingdom 75 28 37.33%
Venezuela 72 2 2.78%
Brazil 54 18 33.33%
Indonesia 45 22 48.89%
Canada 36 7 19.44%
India 36 10 27.78%
Australia 27 7 25.93%
Hungary 16 7 43.75%
Colombia 14 6 42.86%
Germany 14 2 14.29%
Romania 14 8 57.14%
Russian Federation 12 5 41.67%
Spain 11 7 63.64%
Bulgaria 11 1 9.09%
Kenya 10 3 30.00%
Argentina 9 4 44.44%
Czech Republic 9 2 22.22%
Netherlands 8 3 37.50%
Philippines 8 5 62.50%
Ireland 8 5 62.50%
Turkey 8 5 62.50%
Italy 8 2 25.00%
Sweden 8 1 12.50%
France 7 3 42.86%
Latvia 6 3 50.00%
New Zealand 6 3 50.00%
Poland 6 3 50.00%
Malaysia 6 2 33.33%
Belgium 6 3 50.00%
Croatia 5 3 60.00%
Portugal 5 1 20.00%
Mexico 5 1 20.00%
Slovenia 4 0 0.00%
South Africa 4 1 25.00%
Ukraine 4 2 50.00%
Panama 4 0 0.00%
Switzerland 4 0 0.00%
Morocco 4 1 25.00%
Singapore 4 1 25.00%
Thailand 3 2 66.67%
Denmark 3 1 33.33%
Hong Kong 3 1 33.33%
Jamaica 3 1 33.33%
Greece 3 2 66.67%
Ecuador 3 0 0.00%
Moldova 3 2 66.67%
Serbia 3 1 33.33%
Chile 3 1 33.33%
Finland 3 1 33.33%
Luxembourg 2 0 0.00%
Norway 2 0 0.00%
Paraguay 2 0 0.00%
Estonia 2 1 50.00%
Vietnam 2 2 100.00%
Iran 1 1 100.00%
Bolivia 1 0 0.00%
Lithuania 1 1 100.00%
Bosnia and Herzegovina 1 0 0.00%
Nigeria 1 1 100.00%
Albania 1 0 0.00%
Ghana 1 1 100.00%
Sri Lanka 1 0 0.00%
United Arab Emirates 1 0 0.00%
Gibraltar 1 0 0.00%
Pakistan 1 0 0.00%
Belarus 1 0 0.00%
Dominican Republic 1 0 0.00%
Japan 1 0 0.00%
Saudi Arabia 1 0 0.00%
Cayman Islands 1 0 0.00%
Kuwait 1 0 0.00%
Peru 1 0 0.00%

It’s also important to get an idea of how many borrowers are defaulting in those countries, so we’ve included those statistics as well.

Kiril Gantchev | CEO of BitLendingClub | @kgantchev

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