Authors: @Obinna @blakewest
Summary
To set the Goldfinch protocol up for a strong foundation of future growth, and in preparation for exciting future enhancements, the Warbler team has made significant improvements to our approach to risk monitoring and underwriting.
We have also prepared the first community risk update, which we are excited to share. We will be sharing these on a quarterly basis moving forward to increase transparency and ensure the community has a clear, high level understanding of the overall basket of loans.
Updates to Risk Underwriting and Monitoring
We have made several improvements at Warbler to how we approach risk underwriting and monitoring. They include:
- We will start sharing public risk updates with the community on a quarterly basis. We’ll use the monitoring we have been doing internally as a basis for these reports. The first public report is shared below.
- We have reevaluated our internal underwriting guidelines and processes from the ground up and made a number of changes, both to our requirements around borrower security and to the legal templates themselves, that will improve the security of future loans.
- We are bringing on a number of external advisors to provide ongoing support.
- We have made changes to personnel and team structure to better align our team with our future investment strategy.
Opening Up Our Portfolio Risk Assessments
In an effort to increase transparency on all pools, we will start sharing quarterly portfolio risk updates with the community, beginning now. Below, you can find the Q4 risk update.
This Q4 review includes a look through to the ultimate borrowers to which Goldfinch’s credit fund borrowers have provided loans. This included getting underlying data beyond what is required in the loan docs, and performing our own internal review. The goals of our internal reviews are to:
- Get clarity about each underlying borrower that funds have been lent to, inclusive of deal structure.
- Determine our comfort level with each borrower’s underlying loans, and each borrower’s ability to repay their bullet loans.
- Provide a holistic update regarding each borrower’s ability to repay their facilities on time.
After this review, except for previously disclosed issues (Tugende, Stratos, Oriente), we can confirm that, as of today, everything looks good. While confidentiality prevents us from sharing all of the details, these companies are, across the board, adequately capitalized, have well-performing portfolios, and are able to honor their interest and principal repayments when due.
In addition, here are some aggregate stats and themes we discovered during our most recent review:
- Capitalization: Some borrowers achieved profitability in the last quarter, and continue to perform well. Most of the other borrowers are adequately capitalized, with a few recently completed capital raises. We are continuing to keep a close watch on the few companies that are currently in the process of competing capital raises.
- Portfolio Performance: Most portfolios continue to perform strongly. A few have shown some weakening in the last quarter but remain well above covenant thresholds. We are monitoring these closely.
- Collateralization: Our portfolio continues to be overcollateralized, with the average LTV being ~85%.
- Coverage: Our portfolio spans 39 companies in 20 countries with an average exposure of $2.5M per borrower.
We cannot share detailed info in a public forum like this due to confidentiality agreements. However, if you are a backer in any of these pools, you can get in-depth info in the borrowers respective datarooms.
We will continue to be in close contact with all borrowers and do our best to ensure all payments are made as expected.
ALMA
Total Borrowed & Status: $39M, 
on-time
ALMA is a credit fund that creatively deploys capital for sustainable development. ALMA’s debt platform serves high-growth, impact-oriented companies in a range of sectors, primarily in emerging and developing markets in Asia, Africa, and Latin America.
ALMA has raised $39M on Goldfinch spread across 15 borrowers such as consumer lenders, SME lenders, asset financiers, and climate finance companies. All of ALMA’s portfolio companies are in good standing.
Below is more detail on ALMA’s portfolio:
| Borrower Description | Total Exposure | GF Exposure | Status |
|---|---|---|---|
| African micro-finance lender focused on women, with operations in 7 countries | $14,500,000 | $14,137,500 | On time |
| Consumer fintech lender based in India, recently acquired by large non-bank | $1,796,134 | $224,517 | On time |
| MSME lender with an offline/online model based in India | $2,666,667 | $2,600,000 | On time |
| Technology platform that connects shippers with qualified carriers to move and manage loads seamlessly | $6,000,000 | $750,000 | On time |
| Vehicle for mid-market asset-backed secured lending in US | $5,000,000 | $4,875,000 | On time |
| A financing platform offering businesses in Brazil access to growth capital | $4,583,333 | $2,385,416 | On time |
| Developer of high-quality carbon credit projects via improved forest management (IFM) methods mainly in LatAm | $2,000,000 | $1,950,000 | On time |
| Project developer for REDD+ forest conservation credits with traditional landowners of Papua New Guinea | $1,800,000 | $1,755,000 | On time |
| Fintech lender providing loans against insurance and business receivables, based in India | $3,500,000 | $3,412,500 | On time |
| Consumer fintech lender focused on informal workers and women, based in Colombia | $2,000,000 | $1,950,000 | On time |
| Owner of a diverse carbon credit portfolio based in US | $455,000 | $443,625 | On time |
| Consumer fintech lender based in Colombia focused on informal and new-to-credit borrowers | $6,000,000 | $750,000 | On time |
| One of Africa’s largest used car trading and financing platforms | $8,500,000 | $1,062,500 | On time |
| UK-based carbon credit project developer of mangrove and other high-quality projects across Asia, Africa and LatAm | $1,000,000 | $975,000 | On time |
| Panamanian fintech for buying consumer electronic devices focused on new-to-credit borrowers, owned by a PE-backed US lender | $6,500,000 | $812,500 | On time |
| Undeployed cash on hand | $2,709,483 | $892,011 | On time |
Cauris
Total Borrowed & Status: $17M, on-time
Cauris is a mission-driven investment firm that provides private credit to financial technology companies in emerging markets. Working across the Global South—with financings in Africa, Asia and Latin America—Cauris partners with fintechs that are making financial inclusion a reality for tens of millions of consumers and small businesses.
Cauris has raised $17.2M through three pools on Goldfinch. This capital has been lent to 5 borrowers, all of which are in good standing and on time.
Below is more detail on Cauris’ portfolio:
| Borrower Description | Total Exposure | GF Exposure | Status |
|---|---|---|---|
| Emerging market lender focused on consumer financing | $3,995,000 | $3,995,000 | On-time |
| Emerging market lender focused on SME financing | $1,075,000 | $1,075,000 | On time |
| Emerging market lender providing BNPL Financing for businesses and consumers | $4,799,767 | $4,799,767 | On time |
| Emerging market lender providing vehicle financing for gig workers | $5,695,000 | $5,695,000 | On time |
| Cross-border, tech-enabled logistics company providing credit to exporters, importers and freight forwarders | $200,000 | $200,000 | On time |
| Undeployed cash on hand | $1,504,572 | $1,504,572 | On time |
Addem Capital
Total Borrowed & Status: $10M, on-time
Addem Capital is a Mexico City based credit fund that underwrites and funds structured debt facilities for asset originators within five verticals in LATAM: fintech, real estate, energy, agriculture/sustainable foods, and healthcare.
Addem has raised $10M via one pool on Goldfinch. Capital from this pool has been lent to 9 borrowers, all of which are in good standing and on time.
Below is more detail on Addem’s portfolio:
| Borrower Description | Total Exposure | GF Exposure | Status |
|---|---|---|---|
| Affordable loans to Mexican families and small business owners who own real estate. | $972,542 | $972,542 | On time |
| Exclusive Wellness Real Estate development located in San Jose del Cabo, Mexico. | $1,200,000 | $1,200,000 | On time |
| Fintech company focused on the placement and management of group and individual microloans for small entrepreneurs, mainly in the South East of Mexico. | $2,063,774 | $1,723,774 | On time |
| Help companies have cash flow through an online fast and secure way, through a score system that uses AI and securely encrypted data. | $131,200 | $131,200 | On time |
| Lender and collection manager for private schools that helps these institutions to grow faster and lean administrative process at the same time. | $2,584,321 | $2,584,321 | On time |
| Provide agile and tailor-made leasing solutions with competitive rates to Mexican SMEs. | $4,709,207 | $2,786,223 | On time |
| Solving the used car market in Brazil, helping people take advantage of the vehicles as a social mobility tool. | $600,000 | $600,000 | On time |
| Tailor-made leases for Mexican SMEs underserved by the country’s financial system. | $334,816 | $334,816 | On time |
| Used car buyers, unattended by banks, don’t have the same opportunities to improve their quality of life. | $2,766,820 | $2,341,820 | On time |
Lend East
Total Borrowed & Status: $10M, on-time
Lend East is a digital lending platform that connects global institutional capital with alternate lenders in Emerging Asia (Southeast Asia & India). Lend East is revolutionising alternate lending by offering scalable growth capital with zero dilution to technology ventures. Lend East has made high impact investments in Indonesia, the Philippines, Singapore & Vietnam since 2019.
Lend East has committed US $50mn in investments across seven market leading platforms across Singapore, Indonesia, Philippines, Vietnam & India; all borrowers are backed by marquee equity investors like Sequoia, Ant Financial, DST Global, Arbor Ventures
Lend East raised $10M via one pool on Goldfinch. Capital from this pool has been lent to six borrowers, five of which are in good standing and on time
One borrower, Oriente (which represents 16% of Lend East’s fund) in undergoing a restructuring. This was shared in Discord and with Backers many months ago. We are awaiting a court decision to understand the full impact. The limited exposure of Oriente means that in the worst case scenario, Backers would be impacted but the Senior Pool would see no losses.
Below is more detail on Lend East’s portfolio:
| Borrower Description | Total Exposure | GF Exposure | Status |
|---|---|---|---|
| One of the largest consumer lending platforms in Southeast Asia. The company is backed by leading investors such as SCB Group and Silverhorn Group. | $10,000,000 | $2,963,504 | On time |
| Oriente is a consumer focussed fintech lender based in Southeast Asia. | $5,250,000 | $1,555,839 |  Restructuring |
| Education financing company headquartered in Singapore and operational in Indonesia and Philippines | $2,000,000 | $592,701 | On time |
| Leading fintech lender in Southeast Asia wiht a focus on BNPL and short term loans across Singapore, Hong Kong, Malaysia, Philipines, Indonesia and Thailand | $10,000,000 | $2,963,504 | On time |
| Indonesia based consumer fintech lender | $5,000,000 | $1,481,752 | On time |
| Phillipines based fintech offering payroll-linked loans to consumers | $2,000,000 | $592,701 | On time |
Stratos
Total Borrowed & Status: $20M, restructuring
Stratos is a US based credit fund that provides debt capital to US based fintech companies. fintech companies.
As was shared in the governance forums, the Stratos pool faces up to $7M of losses, but those losses will be fully backstopped by Warbler Labs. Warbler is actively pursuing maximum recovery from Stratos, and will keep the community updated.
Below is more detail on Stratos’ portfolio:
| Borrower Description | Total Exposure | GF Exposure | Status |
|---|---|---|---|
| Rezi is a residential lease broker which operates in the multifamily lease market. The company enters into master leases with landlords at a discount to landlords expected rent payments, and subleases these units to tenants, making a spread. Rezi is currently in default of the terms of this loan from Stratos. You can find out more information here | $5,000,000 | $5,000,000 | Restructuring |
| Three Colts acquires, grows and launches ecommerce SaaS companies that provide enterprise software to businesses that operate on Amazon, Shopify and other online retail platforms. The company is well capitalized and continues to perform well. | $13,000,000 | $13,000,000 | On time |
Tugende
Total Borrowed & Status: $5M, restructuring
Tugende is a motorcycle taxi (i.e., boda-boda in Swahili) financing company headquartered in Uganda. In markets where the alternative is for operators to rent motorcycles at exorbitant costs and into perpetuity, Tugende provides affordable financing that allows these operators to own their motorcycles and double their profits from $5/day to $10/day.
The company borrowed $5M from one pool on Goldfinch. They defaulted in July (info here). As we shared in the governance forums, a material restructuring plan has been agreed to in principal that will limit losses from this pool.
The restructuring has not been officially signed yet. But it remains on track. Also, a response plan, for $1M of support was approved by the community, and the first $825k payment has already been made to further reduce losses.
Fazz
Total Borrowed & Status: $1.3M, on-time
Fazz is a financial technology company that provides business accounts offering effortless payment, savings, and credit solutions. In Indonesia, the company serves the warung (small shops) and MSME customer segments through its Fazz Agen brand. In Singapore and Indonesia, they support small to medium-sized businesses and enterprises with thier Fazz Business brand.
The company has raised more than US$180M of equity from global and local investors including Tiger Global, Insignia Venture Partners, B Capital and BRI Ventures.
It is headquartered in Singapore and Indonesia, Fazz has over 700 employees spread across regional offices in Malaysia, Taiwan, and Vietnam.
Fazz raised a $1.3M pool on Goldfinch in April 2023. The company continues to perform strongly, and is on time.