NPL% to Revenue to Book

Updated: Jul 7


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It is showing an acceptable "NPL ratio" and "Revenue to Book ratio"

where

a) red part - Unacceptable (revenue to book ratio lower than 10%),

b) transparent part - Hard for long term business (revenue to book ratio between 10% and 20%) and

c) green part - Long term goal (revenue to book ration over 20%).


Point A shows the values for 30% p.a. interest rate and Point B shows the values for 70% p.a. interest rate


Concluding from the graph and the chart, so it shows that:


POINT A - lender has to make his portfolio to behave as 700 - 749 FICO to be able to lend for 30% -> or have another source of income on the portfolio than the interest rate -> and keep his costs low (under 10% of the book)-> and keep his costs low (under 10% of the book)

POINT B - lender has to make his portfolio to behave as 570 - 620 FICO to be able to lend for 70% -> or have another source of income on the portfolio than the interest rate -> and keep his costs low (under 10% of the book)

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