Mintos – Lender Ratings

There are almost 70 Loan Originators listed on Mintos at any one time. Each of these are rated by Mintos on a sliding scale of A+ (representing low risk) to D (Default). Rating lenders is not straightforward – there are a number of factors that can go into each rating and the weighting of each factor is a matter of opinion and debate.

Current ratings on Mintos are based on assessments of company operations, management, financials, risk appetite, portfolio performance and regulatory environment. Each of these factors are subject to interpretation, estimation and potentially bias. Unfortunately, Mintos do not always get it right.

Case: Eurocent

Who is Eurocent? Eurocent was a loan originator that joined Mintos in March 2017, providing loans from the Polish market. Within 3 months of listing, Mintos suspended Eurocent loans and in 2018 Eurcoent ceased operations and declared itself bankrupt. Investors that had loans with Eurocent are facing loses, even those with a “buyback guarantee” since the loan originator was providing that guarantee.

Mintos are arguably the most transparent P2P platform at the minute, and they regularly publish financial data on each of these loan originators. With this data available, we are free to perform our own assessments on Loan Originators listed. Our aim is to provide an independent assessment on each Loan Originator – this way we can hopefully avoid falling victim to the next Eurocent.

Our Ratings

Last Updated: December 2019

Our ratings are out of maximum score of 100 points – We suggest avoiding Loan Originators that score less than 50 points.

CompanyTotal out of 100Mintos RatingsLatest Financial StatementsAuditedNet Profit (€M)Group GuaranteeFoundedSizeEmployeesCountryNet Profit Margin %Current RatioDebt to Asset Ratio
1PM84.5A31/05/2018Yes5.6No2000950.00180United Kingdom18.731.060.70
CreamFinance78.25B31/12/2018Yes1.6Yes2012401.00360Georgia, Czech Republic, Denmark, Latvia2.641.330.82
ID Finance – Spain54B31/12/2018Yes0.1No201518.0047Spain0.301.571.00
ID Finance – Kazachstan (Holding Company)72B+31/12/2018Yes11.4Yes201627.0054Kazakhstan34.462.960.44
ID Finance – Mexico13B-31/12/2018No-0.5No20172.0047Mexico-0.500.621.56
BB Finance Group69.5A-31/12/2018Yes-1.1Yes2006166.0050Finland-25.531.440.72
EBV Finance69A-31/12/2018Yes0.3No2009105.3051Lithuania6.396.140.89
Everest Finanse67A-31/12/2018Yes-6.6No2000800.402015Poland-10.533.450.75
Capital Service62.5B+31/12/2018Yes-0.5No 1999278.40422Poland-0.601.441.00
Watu Credit61.5B31/12/2018Yes1.6No201537.50320Kenya22.801.180.81
Sun Finance – Simbo60.5B-31/12/2018Yes0.8No201751.3021Denmark10.961.191.02
Finko – Varks59.5B+31/12/2018Yes3.6No2016155.90286Armenia28.341.090.00
Placet Group59B31/12/2018No8.8No2005311.0081Estonia, Lithuania87.386.310.53
Capitalia72B+31/12/2018Yes0.1Capitalia Finance OU: Yes
AS Capital: No
Capitalia Finance UAB: Yes
200760.0016Latvia, Lithuania, Estonia16.942.080.79
ExpressCredit – Botswana35B-31/03/2019Yes-1.6No201516.0039Botwana-52.9712.781.31
ExpressCredit – Zambia34B-31/12/2018Yes-1.1No201620.00204Zambia-19.222.861.13
ExpressCredit – Namibia26B-30/09/2019No0.1No20168.80156Namibia9.662.331.00
Kredit Pintar57B+31/12/2018No6.0Yes2017221.00600Poland26.492.380.41
Acema55A-31/03/2018No2.8No2001106.5031Czech Republic1.431.541.00
ITF Group55B-31/12/2018Yes0.2No201223.60200Bulgaria5.203.210.52
Evergreen Finance52B+31/09/2019No0.3No201431.6040United Kingdom11.4813.330.84
Extra Finance50B31/12/2018Yes0.1No200932.9038Romania0.200.761.00
Novaloans46B+31/03/2019No0.3No201222.6016United Kingdom27.491.001.00
Mikro Capital45.5A-31/12/2018No3.0No2008 1762Russia100.001.360.73
SOS Credit44C+31/12/2018Yes0.2Yes201511.7050Ukraine9.255.481.97
Sun Finance – Dineria42B-31/03/2019No0.1No20168.2061Mexico12.222.620.37
Finko – Sebo40B-31/12/2018Yes37.6No201744.00174Moldova33.100.931.02
Hipocredit39B-31/12/2018No0.1No201415.009Latvia, Lithuania13.390.970.97
Mozipo39B-31/12/2018No-2.5Yes2007173.0051Lithuania, Romania, Denmark-104.710.171.94
Tigo37C+31/12/2018Yes-0.8No20179.6080Republic of Macedonia-98.491.711.27
Peachy36B31/12/2018Yes-0.3No2010118.3056United Kingdom-
Cashwagon35.5B-30/04/2019No-0.4Yes2017170.00936Philippines, Indonesia-5.761.280.80
Kredo Finance30C+31/12/2018Yes-0.8No20175.6085Albania-67.500.880.97
Finko – Dinero27.5B-31/12/2018Yes-46.1No201746.30158Ukraine-51.571.490.62
Aasa25.5B+30/06/2017No-1.1AASA Polska S.A – No
AASA Kredit Svenska AB – Yes
2010516.00184Poland, Finland-3.421.410.71
Sun Finance – Kuki24.5B-31/12/2018No-6.2No2017125.1058Poland-13.581.050.94
Zenka Finance22C+31/08/2019No0.0No2018580Kenya15.1525.150.04
Creditter21C+30/09/2019NoNot givenNo201450.00200Russia0.000.180.90
Finko – Metrokredit20B-30/06/2019No0.0No201744.70154Russia0.001.001.00
Finko – Lendo18C+31/12/2018Yes-6.4No2016103.205Georgia-13.230.811.21
Sun Finance – Tengo18B-30/09/2018No-0.3No201753.00296Kazakhstan-6.910.000.00
Sun Finance – Bino0B-31/12/2017No-2.0No201741.1024Latvia-126.670.771.27

Latest Updates:

December: A high risk Turkish lender Wowwo joined the platform. The loan originator is below 50 in our table above.

Licenses for LO’s Lutecredit and Monego were revoked by the Central bank of Kosovo. Mintos decided to suspend all loans issued from these companies. Follow this story here.

November: Loan Originator Rapido Finance was suspended from the Mintos platform due to the loan originators failure to make payments to investors, combined with management failure to show steps to resolve this failure. Read more about this here.

Two new loan originators were launched on the platform; Dinerito Audaz (Mexico) and Nexus (Russia). Neither loan originator reaches our suggested minimum score rating of 50, and as such we suggest you avoid these lenders.

October: Mintos downgraded two loan originators: Aasa Poland has been downgraded from A- to B+ and Rapido Finance from B- to C. Check out their post here to see the reason why.

Lenders to Avoid

Mintos has recently experienced some difficulties with collecting payments from Loan Originators, highlighting the need to invest in high quality loan originators in order to protect investments. Below we’ve listed 2 loan originators with a massive red flag that you should avoid.

One of the first things we look for with lenders is an audited set of financial statements. This provides a level of assurance that the data you are looking at has been verified by an independent third party. With Peachy, we noted that the auditors have highlighted a few points that we would like to bring to your attention:

  • The company incurred a loss for the year of 259k
  • Total liabilities exceed total assets by 1.2m
  • Company directors note that there are material uncertainties exist that cast doubt on the company ability to continue as a going concern. (i.e. Good chance of going out of business!)

Auditors are very restricted on what they can say in financial statements. Arguably, the most powerful and damning language that an auditor can use is to say that the company may not “continue as a going concern.” What this means in reality is that management of the company have not provided sufficient evidence that would support the assertion that the company can continue for another 12 months, or that there is a massive question mark over this. Put simply, the company is in trouble and is not showing signs of improving! We suggest avoiding this LO.

It took until October 2019 for Lendo to release their financial data for 2018, an immediate red flag. Similarly to Peachy, the auditors have highlighted a few points that we will reiterate:

  • The Group incurred a net loss of GEL6,433,992
  • The Group had a negative equity of GE18,452,609.
  • Company directors note that there are material uncertainties exist that cast doubt on the company ability to continue as a going concern.

Generally, when a company releases their financial statements late, it is a sign that they are in dispute with their auditors (over something that they would prefer not to put in!). In this case, it appears Lendo did not want to disclose the negative results to investors. Additionally, the company was fined almost 1.5m by the Revenue Service, which management are disputing.

Our Rating Criteria

We rate lenders using 12 different criteria covering 4 different categories. Don’t agree with our ratings? Great! Let us know in the comments. We update company ratings each month and would love to hear your feedback on how we can improve.

Financial Performance (25%)

A. Net Profit: A profitable company is better to invest in than a non – profitable company. Simple, right?

B. Current Ratio: This is a simple financial metric that shows us a company’s ability to pay short term and long term obligations. A healthy ratio is about a 2:1 – this is what we are looking for here.

C. Net Profit Margin: This shows us management ability to transform revenue into a profit. The higher, the better.

D. Debt to Asset Ratio: Debt is risky – High interest repayments on debt can be the downfall of a company if not managed properly. The debt to asset ratio measures the total amount of assets financed by creditors rather than investors. A healthy ratio is about 40% (or 0.4) – the average across all lenders is 0.78!

Transparency (20%)

Audited Financial Statements: This is a big one for us – If the company does not provide audited financial statements how can we trust the data presented? While a new company does not have the time or money to invest in performing audits (nor should it), unaudited financial statements can provide misleading information to investors and are inherently more risky. 20 points for providing audited FS, 0 for not.

Intrinsic Advantages/Company Strategy (35%)

A. Country – Based on the country where the Loan Originators primary operations are performed. We averaged country ratings between the main rating agencies (Moody’s, S&P and Fitch) in order to reflect the risk of investing in these countries. High grade countries such as the US receive 10 points, highly speculative countries such as Cuba can receive -10.

B. Founded – Based on the “recession factor”. The truth is that we don’t really know how the P2P industry will perform in a recession or how many Loan Originators will survive. What we do know is that a Loan Originators that survived the last recession is less risky then a company that has only originated in the last few years. 10 points for companies created before 2008, 0 points for those created after.

C. Size – Larger companies are less risky than smaller companies, right?

D. Employees – More employees means more knowledge and know-how on how to deal with tricky situations.

E. Group Guarantee – A loan originator is structured so that they have separate and distinct legal entities, operating as subsidiaries in different jurisdictions, each reporting to the “Group” entity. If an under-performing performing entity declares itself bankrupt, your money could go down with it. However, if the company has a Group Guarantee, this is essentially a guarantee from the Group that they will support all of their subsidiaries, underperforming or not.

Other (20%)

A. Skin In the Game – All loan originators that place loans on the marketplace are required to keep a certain percentage of each loan, which is their stake in the loan. This helps to align investor interests with Loan Originator interests. For us, the higher the better.

B. Mintos Ratings – Yes, we admit it – Mintos have access to information that we do not! Not all data is published, Mintos communicated regularly with their LO’s and they have a team of staff that review current loan performance and other data. Rather than fight this, we have decided to build this into our own ratings. An A+ LO receives 15 points, and there is a sliding scale for those with lower ratings.

C. Discretionary – Our final rating criteria allows us to take a maximum of 20 points off the total scores of lenders. As not everything is captured by the data provided in the Financial Statements, this metric allows us to downgrade lenders for various reasons. In the table above, several lenders have been downgraded for the late release of Financial Statements (there is no reason why we should not have access to 2018 data by now!) and in the case of Aforti, the lender has been downgraded due to recent funding/IT difficulties experienced by the company.

Other factors that may result in a downgrade include recent poor loan performance, negative announcements about the companies or anything really! The idea is to use this metric as a means to downgrade lenders before they release negative Financial Statements, in order to get ahead of the rush to sell.

Click HERE to set up an account with Mintos, and receive a bonus on investments made in the first 3 months!

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