As the only platform in Switzerland, CreditJust offers its investors risk diversification through the solidarity agreement, regulated in the investor agreement. As a marketplace lending platform, we mediate loans between private individuals and companies, which are financed by institutional and private investors. Every financing request is checked by our credit department before it is activated on our online platform. According to the credit check, a rating level is used. Based on our scoring, borrowers who have the right general conditions and have a security or very good credit rating are usually classified in one of the top ratings (AAA, AA, A). If the creditworthiness is lower and the risk of default associated with it is higher, the rating is BC.
On the third day after the debtor’s monthly installment is due, we will send him a payment reminder. If the borrower was unable to comply with the payment reminder, we issue a first and second reminder. Our first information to our investors is when collection measures have been initiated.
How the solidarity agreement works
The CreditJust solidarity agreement comes into effect after a credit balance has not been successfully recovered despite the recovery process and a definite default has been identified. Based on this, all investors within the same credit type and rating level bear the default in solidarity according to their investment amount.
If there is a total loss of credit within a credit type and rating level, the percentage of this pot is first determined. An example: A personal loan of rating level B is USD 7,500. The total pot for the credit type private and rating level B is USD 1,200,000. This means that the percentage of failure in the entire pot amounts to 0.63%. All investors therefore make 0.63% of their investments within this pot. The individually calculated solidarity contribution of each investor will be deducted from the next possible payment to the investor.
This is what our customers say about the solidarity agreement after the first loan default
Anonymous investor since 2016: “It is only possible to sleep peacefully with CreditJust . Do you know of any other platform that offers this security mechanism? Investing at CreditJust really makes a big difference. That is one of the many reasons why I only invested in loan projects here. ”
Anonymous investor since 2015 “I was a little annoyed about the defaults, but I’m glad that the solidarity clause came into effect. To be honest, I didn’t quite understand the principle at first, but now that the failures have come, everything is clear. I am also invested in loans on other platforms and there the failures lead to massive yield losses. Yes, I have now lost a few francs of interest, but I certainly don’t have to worry about CreditJust . I think that’s cool. “
Diversification of the keys to the solidarity agreement
In short: the broader you spread your personal portfolio across different loan types and rating levels, the lower your potential solidarity share in the event of a default.
First, determine your personal strategy. From an investment sum of over USD 100,000, we offer you the opportunity to develop a strategy together. Of course, you determine yourself at any time in which type of credit and rating level you would like to invest.
The comparison of a credit default with and without a solidarity agreement
The graphic above shows how high the financial loss would be (red line) if no solidarity agreement or other corresponding measure had been implemented. The solidarity agreement (green line) means that the investor suffers a comparatively small loss.
Basic idea of the solidarity agreement
CreditJust is the first and only marketplace lending platform in Switzerland that enables simple and efficient risk diversification via the solidarity agreement. The basic idea was that private small investors can diversify just as easily via a simple mechanism as professionals and large investors. The diversification through the solidarity agreement enables larger investors to spread risk even when a large amount is invested in a single loan. With the solidarity agreement, it is not necessary to invest in many small USD 500 loans to achieve the necessary diversification.
Do you have further questions about the solidarity agreement or would you like to register with us as an investor? Use our chat to communicate with us in real time or click the link below to register with us as an investor.