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Introduction – Orchard Monthly Industry Report

The marketplace lending movement is unique in the financial world for the richness of its data and the transparency with which this information is made available.  Over the past several years, this information has been invaluable to investors, originators, and industry observers in building confidence and attracting significant institutional capital to this new investment class.

As a technology and infrastructure platform working with the largest originators and investors in the space, Orchard receives regular data feeds from our originator data partners, who provide detailed information on new originations and the performance of outstanding loan portfolios. With this vast quantity of information, along with the data aggregation, processing, and visualization technology built by Orchard’s engineering and analytics teams, we are now introducing data-driven research offerings to offer originators and investors the ability to observe important trends, benchmarks, and other key statistics as the industry develops.

Orchard’s Monthly Industry Report provides a data-rich glimpse into trends within each major asset class in marketplace lending. We standardize, consolidate, and analyze this data in order to present valuable insight into volumes, trends, and performance along various dimensions.  Below are some highlights from this month’s report on the Consumer Unsecured segment within marketplace lending:

  • Borrower interest rates have been relatively consistent, with a 96 bps increase in September and a 61 bps decrease year-over-year.  We expect interest rates to continue to rise following the Federal Reserve’s interest rate raise in December 2015.

Weighted Average Interest Rate
Weighted Average Interest Rate

  • Interest rates as a function of credit quality, measured by FICO scores, have remained fairly constant over the last 12 months.  The exception is the lowest FICO score group, those with scores under 680.

Borrower Interest Rate by FICO
Borrower Interest Rate by FICO

  • Average loan size of new originations has increased from $7,024 in October of 2014 to $11,516 in September 2015 due to shift in the population from smaller loans (<$5,000) to larger loans (>$15,000).

Borrower Interest Rate by Loan Size
Borrower Interest Rate by Loan Size

  • As a percentage of original principal, prepayment rates are slightly lower for 2015 than previous vintages, which converge at a cumulative maximum of just under 30%.

Cumulative Prepayment Rates

Cumulative Prepayment Rates

  • Monthly Coincidental 30 Days Late Rate has increased consistently over the past 7 months, from 0.53% in April 2015 to 0.71% by November – a slight decrease from 0.78% in October.  We may be starting to see that increase pass into charge-offs, with Monthly Coincidental Charge Off Rates increasing from 0.33% in September to 0.43% by November.

    Monthly Coincidental 30-Days Late Rate

Monthly Coincidental 30-Days Late Rate

Monthly Coincidental Charge Off Rates
Monthly Coincidental Charge Off Rates

Access to Orchard Research is available to Orchard clients and data partners.  In addition to the formal report, we also make available our interactive Market Data Platform, which enables detailed analysis at a custom-cohort level.

Market Data
To learn more about the Monthly Industry Report, please contact us.