Loan portfolio statistics

How Crowdberry assesses credit risk: credit scores A–Fx

When investing in a loan opportunity, one of the key questions is naturally: “How confident can I be that this company will repay the loan?” This is exactly what a credit score is designed to assess – it provides an overall evaluation of the borrower’s financial health, repayment capacity and creditworthiness.

Crowdberry uses a consistent credit rating system that helps investors compare investment opportunities, better understand the associated risks and make informed investment decisions. The result is a credit score ranging from A (lowest risk) to Fx (highest risk).

A – Highest Level of Creditworthiness

The company owner demonstrates excellent creditworthiness, supported by a stable and sound financial position, low leverage, strong profitability and healthy liquidity. The management team is highly experienced and has a proven track record of successfully delivering previous projects. The company benefits from a strong market position and solid growth potential. The project owner’s probability of default is assessed as very low, at up to 4%.

B – High Level of Creditworthiness

The company owner demonstrates very good creditworthiness, supported by a stable and sound financial position, moderate leverage, solid profitability and healthy liquidity. The management team is experienced. The company has a stable market position with strong growth potential. The company’s probability of default is assessed as low, at up to 8%.

C – Moderate Level of Creditworthiness

The company owner demonstrates good creditworthiness, although certain financial health indicators may be close to threshold levels, particularly in terms of leverage, profitability, liquidity or management quality. The company has a solid market position, with potential for further growth. The probability of default of the project owner is assessed as moderate, at up to 10%.

D – Lower Level of Creditworthiness

The company owner demonstrates lower creditworthiness, with certain financial indicators relating to leverage, profitability or liquidity at borderline levels. Its market position is satisfactory, while further growth potential may be limited. The company’s probability of default is assessed as elevated, at up to 15%.

Fx – Lowest Level of Creditworthiness

The company owner demonstrates low creditworthiness, with financial indicators that are weak relative to its sector. Its competitive position is limited, and further growth is not expected. The company’s probability of default is assessed as high, at up to 50%.

NR / Default

This rating is assigned in cases where an economic loss is expected, where payments on existing obligations are more than 90 days past due, or where restructuring or bankruptcy proceedings have been initiated.

Default Rate and Loan Portfolio Performance

Regulatory framework

The calculation and disclosure of default rates are based on the European regulatory framework applicable to crowdfunding service providers, in particular Regulation (EU) 2020/1503 and the related Regulatory Technical Standards (RTS). The framework is intended to ensure consistency, comparability and transparency in the disclosure of credit risk information.

How default is defined under the regulatory framework
A loan is considered to be in default if:

• the borrower is considered unlikely to repay its credit obligations in full without recourse to measures such as the realisation of collateral (“unlikely to pay”); or
• the borrower is more than 90 days past due on a material credit obligation.

Amendments to repayment schedules or temporary payment deferrals that are expressly permitted under the loan agreement are not automatically treated as a default; however, they are assessed individually from a credit risk perspective.

Default rate monitoring at Crowdberry
Crowdberry monitors the default rate at the level of individual loans rather than by the volume of invested capital. Each loan carries equal weight in the calculation, in line with the applicable regulatory methodology. Portfolio management includes ongoing monitoring of borrowers’ financial position and compliance with contractual obligations.

In the event of a breach of contractual obligations, the loan documentation provides for the application of protective measures, including the right to accelerate the loan and take appropriate steps to safeguard investors’ rights.

Current portfolio status
The first loan on the Crowdberry platform was originated on 7 June 2024. As a result, the platform does not yet have a complete 36-month historical time series, which is used as a reference period under the applicable regulatory framework. The default rate is therefore currently calculated for the entire period since the platform began originating loans and is presented subject to this limitation.

As of the date of publication:

• no loans are classified as being in default,
• there are no overdue payments of interest or principal,
• ongoing portfolio monitoring does not indicate an elevated risk of non-payment in respect of existing obligations.