A small bank sets the interest rates it charges on loans to its business clients at a level equal to the sum of the loans' expected loss, the bank's funding cost, and a margin for the bank's profit and operating expenses. A risk analyst at the bank compiles the following information related to the loan portfolio:

| Average recovery rate of loans | 45% |

|------------------------------|-----|

| Margin for profit and operating expenses | 2.10% |

| Average funding cost | 4.85% |

| Average interest rate on loans | 8.18% |

Given this information, what is the estimated average probability of default for the loans in the portfolio?