Analyzing Goldfinch Borrower performance
Resources for assessing the performance Goldfinch’s Borrowers when exploring due diligence
- There are a variety of resources to start analyzing the performance of Goldfinch’s Borrowers to date, including live data dashboards and portfolio profiles
- Pool-level data is easily accessible, including borrower stats, financials, and team profiles.
- Channels are available to provide Borrower performance metrics prior to Pool launches, as well as post-close for continuous investor performance reporting
- To protect Borrowers’ sensitive businesses performance information some resources are NDA or token-gated for active Investors
Aggregate Pool and protocol performance
Anyone interested in exploring the aggregate performance of Goldfinch’s Borrowers and Pools can start by viewing the Goldfinch protocol’s Dune dashboards — live, continuously updated performance dashboards pulling on-chain data to provide visibility to the protocol’s key performance metrics.
The main Goldfinch Metrics dashboard includes metrics for analyzing aggregate Borrower performance, specifically:
- Total loss rate %: the default rate across all Borrower Pools on Goldfinch, 0% for all loans to date as of August 2022
- Repayments: cumulative and 30 day data showing Borrower repayments across all Pools on the protocol
- Gains: overall protocol gains across Pools, measured as interest paid minus writedowns (defaults)
Other metrics on the dashboard include key performance metrics for the network overall. These include both 30 day and cumulative charts tracking aggregate network indicators, such as:
- Active loans: the value of loans currently outstanding on the network
- Protocol revenue: the revenue generated by the network from repayment and withdrawal fees, which, following the implementation of community governance proposal GIP-13 Tokenomics Update Phase 1: Membership Vaults, Goldfinch Members will receive a pro-rata share of
- APY, 30d trailing: the average overall APY on the network across active Borrower Pools and the Goldfinch Senior Pool
Analyzing these metrics provides a holistic view into how the loans on Goldfinch are actively performing, alongside how that performance impacts the protocol’s performance overall. At any time, those interested in becoming Goldfinch Investors can have complete, real-time visibility into Borrowers’ default rates, repayment history, and how that equates into revenue and utilization for Goldfinch.
An additional Dune dashboard, the Goldfinch Borrower Impact Estimates dash provides live aggregate visibility to how Borrowers deploy the funds they have accessed on Goldfinch.
Goldfinch’s Borrowers are currently all established credit funds and fintechs with proven track records in emerging markets. They utilize the USDC they borrow on Goldfinch to make loans in their own markets — unlocking the promise of DeFi’s global access to capital while leaving the end-loan process to those best equipped to service it on the ground.
The Borrower Impact Estimates dashboard provides visibility into how Borrowers are executing that mission, live. It includes self-reported estimates on the total people and businesses reached with funding via Goldfinch’s Borrowers using their Goldfinch loans, the active countries that Goldfinch’s Borrowers have deployed to with the funds they have drawn down from Goldfinch, and the value of active end loans per country deployed.
In July 2022, Goldfinch crossed over 1 million people and businesses reached with USDC funding via the network’s Borrowers, while maintaining a 0% default rate and 11.04% USDC APY est. trailing 30d on average. Goldfinch Investors, and those considering participating in the network, can access this data live at any time to continuously monitor and analyze the performance of Goldfinch’s Borrowers.
Anyone can pull from Goldfinch’s live on-chain data to create public dashboards for expanded analysis. As one example, Goldfinch community member and finance professional Hong Fan created a Dune dashboard, Goldfinch Finance Credit Monitor, to offer a more formalized view of credit metrics familiar to common structured loan analysis.
The dashboard includes key aggregate parameters such as:
- Average funding cost for loans on Goldfinch across the network
- Leverage depicted by advance rate (senior loan amount / borrower amount) or leverage ratio (senior loan amount / junior loan amount)
- Borrowing Term and Borrowing Amount across Pools on the protocol per tranche and in aggregate across Pools
- Network credit terms such as average remaining term across Pools on the network
In addition, Fan’s Credit Monitor dashboard includes Single Pool Credit Monitor data per Borrower Pool, including live information for all Pools such as financing terms, full repayment due dates, loan factors, outstanding senior and junior Pool positions, senior advance rate, leverage ratio, and more.
As part of Fan’s full analysis of Goldfinch’s credit metrics and model, the dashboard also includes a view of the Almavest Basket #3 Pool’s cashflow for interest and principal across the Pool and its senior and junior tranches.
Because Goldfinch’s Borrowers are currently all established credit funds and fintechs with track records of excellent performance, in addition to the on-chain data for Borrowers’ Goldfinch-specific track record, Investors can also explore the activities outside of Goldfinch that Borrowers engage in.
To start, all new Borrowers on Goldfinch publish a Borrower Profile in the Goldfinch governance forum. These public resources provide key information to start researching a Borrower, such as a summary of the Borrower’s fund, goals, and business model, or key highlights of the Borrower’s operation, such as the regions they operate in, metrics on their past deal and portfolio evaluation traction, successes of their portfolio companies, large partnerships, and other notable value propositions.
The profiles create a starting point to begin exploring the overall performance of Borrowers.
At the time of publishing in August 2022, Goldfinch’s Borrowers are all in excellent standing and displaying growth and traction across their unique sectors, with public moves over the last quarter including:
- Cauris Finance provided a $20m credit facility to Asaak, a provider of mobile-based equipment financing in Uganda, and also provided $10m in debt financing to Float, a Y Combinator-backed cash management and credit fintech, to lead their $17m seed for providing credit lines to African businesses.
- Addem Capital granted various credit lines in the agro-fintech industry, and announced an alliance with real estate group Vertical CDMX to finance the construction of their fifth project in Mexico City building high-value assets while housing 268 families.
- ALMA extended a $10m facility to Juancho Te Presta, a leading Colombian fintech lender, to offer a 100% digital credit solution with special attention to the needs of women, and reported that their financing accessed via Goldfinch has enabled 30,000 schools in Africa to provide access to clean drinking water to over 12 million students via portfolio company Impact Water.
- Lend East provided $10m in debt financing to Akulaku, an Indonesia-based digital consumer finance platform expecting an eminent $300m IPO according to DealStreetAsia’s reporting.
Due diligence datarooms and continuous performance reporting
When proposing a Pool to the network Borrowers are required to launch a due diligence dataroom. These are NDA-protected (although anyone can access them after signing), as they contain sensitive information about the Borrower’s performance.
At a minimum, a Borrower’s dataroom includes:
- An overview speaking to the Borrower’s historical performance
- Material speaking to the performance of their portfolio/end borrowers
- Transaction structure for the Borrower Pool, and a security overview document explaining how security will work in the instance of a default
- Agreements the Borrower has in place with their portfolio/end borrowers
- Deal-specific documentation for the proposed Pool, including:
- Term sheets
- Loan Agreements
- Security Agreements
Alongside the dataroom, Borrowers launch a two-way messaging channel (generally hosted on Telegram or Discord) for potential Investors who have signed the dataroom NDA to ask questions of the Borrower directly, or to request additional performance data from the Borrower.
Additional standardized channels for more efficient communication between active Investors and Borrowers on the protocol were launched in July 2022, enabling Borrowers to easily share continuous performance reporting, updates on their pools and to communicate directly with Investors. These channels are launched for a Pool’s investors once the Pool has been funded and closed.
This new Borrower Communications tooling, first of its kind to use web3 solutions for investor reporting, provides increased transparency for active Goldfinch Investors by providing access to:
- Trusted, secure, real-time communication channels between Borrowers and Investors
- Accessible way for Borrowers to fulfill any and all obligatory Investor Reporting requirements, creating easier inroads to access the reporting that exists in their off-chain documents and agreements
- More effective channels for Investors to securely communicate with one another, unlocking enhanced collective bargaining power
To learn more about these pre- and post-close dataroom resources, and how to access them for conducting due diligence on specific Borrowers, read our post on Getting started: Resources for Goldfinch due diligence and underwriting.
Ready to get started as an Investor on the protocol? Peruse open Pools on the app, follow the step-by-step guide in the documentation, and begin by registering your Unique Identity NFT for verification (UID).
Still looking to learn more about Goldfinch first? Read the protocol overview to explore how Goldfinch works, subscribe to the weekly Community Updates for the latest on the Goldfinch network, and join the community on Discord to continue learning.