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: November 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 MarginCurrent RatioDebt to Asset Ratio
Mogo87A31/12/2018Yes4.6 Yes2012233.60275Several8.541.670.91
1PM84.5A31/05/2018Yes5.6 No2000950.00180United Kingdom18.731.060.70
Banknote82A-31/12/2018Yes4.8 Yes2009141.00305Latvia26.571.550.78
Vizia81A-31/12/2018Yes4.8 Yes200934.90305Latvia114.101.591.00
CreamFinance78.25B31/12/2018Yes1.6 Yes2012401.00360Georgia, Czech Republic, Denmark, Latvia2.641.330.82
Credissimo74A-31/12/2018Yes3.2 No2007154.20130Bulgaria9.015.840.16
Dziesiatka74B-31/12/2018Yes0.6 No200111.20440Poland25.2310.260.56
Lutecredit72.5B+31/12/2018Yes7.3 Yes2008187.00266Several21.891.300.77
ID Finance72.33B31/12/2018YEs12.5 IDFinance Spain, S.L.: No
MFO OnlineKazFinance LLP (Kazakhstan): Yes
IDF CAPITAL, S.A.P.I DE C.V., SOFOM E.N.R.: No
2012688.00400Georgia, Spain, Kazachstan10.571.140.91
BB Finance Group69.5A-31/12/2018Yes-1.1 Yes2006166.0050Finland-25.531.440.72
EBV Finance69A-31/12/2018Yes0.3 No2009105.3051Lithuania6.396.140.89
CashCredit67.5B31/12/2018Yes0.7 No201171.00378Bulgaria17.101.330.39
Credius67B+31/12/2018Yes1.3 No201346.40170Romania10.385.121.00
Everest Finanse67A-31/12/2018Yes-6.6 No2000800.402015Poland-10.533.450.75
AgroCredit66A-31/12/2018Yes0.2 No201144.003Latvia28.535.630.69
Capital Service62.5B+31/12/2018Yes-0.5 No 1999278.40422Poland-0.601.441.00
Akulaku62B+30/12/2018Yes-35.3 Yes2016776.802500Indonesia-28.162.910.35
Creditstar61.5B31/12/2018No2.8 Yes2006100Several11.031.250.79
Watu Credit61.5B31/12/2018Yes1.6 No201537.50320Kenya22.801.180.81
Simbo60.5B-31/12/2018Yes0.8 No201751.3021Denmark10.961.191.02
Varks59.5B+31/12/2018Yes0.0 No2016155.90286Armenia28.341.090.00
Placet Group59B31/12/2018No8.8 No2005311.0081Estonia, Lithuania87.386.310.53
Capitalia 58.5B+31/12/2018No0.0 Capitalia Finance OU: Yes
AS Capital: No
Capitalia Finance UAB: Yes
200760.0016Latvia, Lithuania, Estonia5.222.561.00
ExpressCredit58.5B-31/12/2018Yes0.5 No201536.00243Botswana, Zambia19.770.000.00
Kredit Pintar57B+31/12/2018No6.0 Yes2017221.00600Poland26.492.380.41
EcoFinance56B31/12/2018Yes0.0 No201561.3023Russia0.073.030.56
Acema55A-31/03/2018No2.8 No2001106.5031Czech Republic1.431.541.00
ITF Group55B-31/12/2018Yes0.2 No201223.60200Bulgaria5.203.210.52
Debifo50.5B31/12/2018Yes-0.1 No2015112.0019Lithuania-9.971.011.00
Extra Finance50B31/12/2018Yes0.1 No200932.9038Romania0.200.761.00
Kviku48.5B31/12/2018Yes0.1 No201318.0032Russia6.681.220.82
Lime46.5B31/12/2018Yes0.0 No201396.80175Russia2.091.390.72
Alfakredyt46B31/12/2018No0.3 No201355.5026Poland12.464.020.77
Novaloans46B+31/03/2019No0.3 No201222.6016United Kingdom27.491.001.00
Mikro Capital45.5A-31/12/2018No3.0 No2008 1762Russia100.001.360.73
SOS Credit44C+31/12/2018Yes0.2 Yes201511.7050Ukraine9.255.481.97
Monego43C+31/12/2018Yes-0.6 No201821.30213Kosovo-94.3718.400.92
Dineria42B-31/03/2019No0.1 No20168.2061Mexico12.222.620.37
Stikcredit42B-31/12/2018No0.9 No201314.0071Bulgaria68.843.980.25
Dineo41B-31/12/2018No2.2 No2014200.0037Spain10.674.791.00
DozarPlati40.5B-31/12/2018No0.9 No201132.40361Russia5.531.470.68
Kredit2440C+31/12/2018Yes-0.6 Yes201315.0071Kazakhstan-10.390.861.21
Sebo40B-31/12/2018Yes1.9 No201744.00174Moldova33.100.931.02
Hipocredit39B-31/12/2018No0.1 No201415.009Latvia, Lithuania13.390.970.97
Mozipo39B-31/12/2018No-2.5 Yes2007173.0051Lithuania, Romania, Denmark-104.710.171.94
Aforti38.5C+31/12/2018Yes0.1 Yes200920.0056Poland0.061.481.00
Fireof37B31/03/2019No0.3 No201628.0012Spain66.940.850.66
Tigo37C+31/12/2018Yes-0.8 No20179.6080Republic of Macedonia-98.491.711.27
Credilikeme36C+30/03/2019No0.2 No20125.2023Mexico46.090.190.30
Peachy36B31/12/2018Yes-0.3 No2010118.3056United Kingdom-4.142.011.20
Cashwagon35.5B-30/04/2019No-0.4 Yes2017170.00936Philippines, Indonesia-5.761.280.80
Ecash24C+31/12/2018Yes-0.6 No201714.00140Ukraine-67.500.880.97
Nexus31.5B30/09/2019No0.2 No201623.8015Russia8.801.250.79
Kredo Finance30C+31/12/2018Yes-0.8 No20175.6085Albania-67.500.880.97
LFTech30B-31/12/2017No9.2 No2012184.00402Kazakhstan37.805.880.17
Getbucks28B31/12/2018No-9.9 Yes2011230.00800Several-13.310.860.92
Dinero27.5B-31/12/2018Yes-1.5 No201746.30158Ukraine-51.571.490.62
Esto27B-31/07/2019No0.0 No201714.2015Estonia4.220.961.00
Aasa25.5B+30/06/2017No-1.1 AASA Polska S.A – No
AASA Kredit Svenska AB – Yes
2010516.00184Poland, Finland-3.421.410.71
Kuki24.5B-31/12/2018No-1.6 No2017125.1058Poland-3.551.050.94
Lendrock24B-31/12/2018No-0.3 No20153.5018Spain-108.192.520.33
AlexCredit22B-31/03/2019No0.0 No201724.0060Ukraine14.803.540.07
Zenka Finance22C+31/08/2019No0.0 No2018580Kenya15.1525.150.04
RapiCredit21B-31/12/2018No-0.6 No201430.0080Colombia-38.930.840.97
Metrokredit20B-30/06/2019No0.0 No201744.70154Russia0.001.001.00
Lendo18C+31/12/2018Yes-2.1 No2016103.205Georgia-13.230.811.21
Tengo18B-30/09/2018No-0.3 No201753.00296Kazakhstan-6.910.000.00
Dinerito12.4B-31/12/2018No-1.5 No201112.4074Mexico-7.034.290.61
Rapido10.5D31/12/2018Yes-1.7 No2017130.0040Spain-25.101.441.40
Eurocent8.5D31/12/2017No-1.2 No200442.0078Poland-21.111.010.64
Bino0B-31/12/2017No-2.0 No201741.1024Latvia-126.670.771.27

Latest Updates:

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!)

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!

Mintos – Investment Guide

So, you’ve decided to go down the Mintos investment journey but don’t know where to start, don’t know the risks and are afraid to take that first step. This guide will answer all the questions you didn’t even know you had and hopefully resolve at least some of your investment worries. We will get you thinking about the risks you will face and will give you a peek inside our investment strategy. By running through what we believe are the most crucial risks and giving you practical strategies you can use to reduce these risks, we aim to help you find the investment strategy most suited to you. Sounds good? Let’s get into it.

Don’t be a turkey

Nassim Taleb tells the story of a turkey who is fed every morning at the same time, the same meal at the same place, every morning for 1,000 days. Eventually, the turkey comes to expect that every visit from the farmer means that food is coming his way. Considering that this is all the turkey has seen since birth, the turkey becomes conditioned to associate the farmer with food. But then day 1,001 arrives and it’s 2 days before thanksgiving. Instead of carrying a bag of grains, the farmer is carrying an axe. The turkey quickly learns that its expectations were catastrophically wrong, and that what has happened in the past does not necessarily mean it will continue to happen in the future. And now the turkey is dinner. Taleb’s advice? “Don’t be the turkey”.

So you see an investment opportunity offering 20%, 30% even 40% returns! You’ve been investing for months now and all you can see is money coming in with no downside. Brilliant, right? Not exactly. Unless you are the next Warren Buffet averaging returns of 20% for the last 50 years, the chances are that earning this high a return year after year is unsustainable, and eventually you will be hit by something unexpected and see your hard earned returns fall drastically overnight. Our advice and the purpose of this guide: Learn the risks involved in investing, mitigate them as best you can, and don’t become the turkey.

RISK 1 – Portfolio Risk

I’m sure you’ve heard the expression “don’t put all your eggs in one basket”. Well, in this case, our advice is don’t put all your money into one asset class. P2P investing falls into the category of alternative invests. It is still a relatively new and unproven asset class, so spread your money around. You could invest in an index fund that tracks the S&P 500, bonds, gold or if you are feeling confident, why not try your hand picking individual stocks? Try to put your money into uncorrelated asset classes, so that when one is not performing, another will help pick up the slack.

If your not sure where to start, take some advice from the master of investing Warren Buffet and consider going with an index fund that tracks the market.

Vanguard ETF’s are one of the most popular – pick one that tracks the S&P 500 so your returns would be equal to the market returns. We use Degiro for our stock portfolio as the fees are amongst the lowest – Click here to sign up and receive a 20 euro joining bonus.

RISK 2 – Platform Risk

This is the risk that the platform itself goes out of business. Mintos is the biggest in Europe and is very stable – the risk here is very low (See the latest Financial statements here). Market data on P2P platforms is tracked by a company called Brismo – who provide an extremely impressive free tool that P2P investors should be interest in. Click on the link here, scroll down to the “regional volume” section and select “EU” to see how all EU platforms are performing. We like to focus on the “last 3 months” and “last 12 months” volume for each platforms – this is a good test of the current investor confidence. As you will see, Mintos are head and shoulders above all other players in the EU at the minute.

We suggest that once you’ve got to grips with one P2P Platform, consider investing in another. Therefore, if one platform goes out of business, you are protected on the downside and have spread your money across multiple platforms. Have a look at some of our other P2P platform reviews to see if any of these stand out for you:

MINTOS SPECIFIC

Right. So you’ve settled on Mintos and are ready to take the plunge, dive in head first and get your money working for you.  You understand the Macro risks, but are not sure yet how to tackle the site. Below we’ve outlined some Mintos specific risks and strategy’s you can implement to reduce these risks.

RISK 3 – The loan you select defaults

There is a risk that the loan you choose to invest in is never repaid by the borrower. Each loan originator has their own process in accepting borrowers and recovering bad debts, so the percentage of defaulted borrowers should be low. However, this can be reduced significantly by selecting loans that provide a buyback guarantee. A buyback guarantee is a guarantee from the loan originator (not Mintos!) that if the loan has not been paid in the last 60 days, they will buy the loan back from you and absorb the bad debt. Some loan originators pay interest on these bad debts, some don’t. (Check out the table here to see who does and who doesn’t) Selecting loan originators that do pay interest on bad debts will help boost your earnings slightly, but not enough that you should spend too much time focusing on this.

When selecting loans, we suggest investing the minimum amount of 10 euro per loan so that if the loan repayments are not as expected, your capital is not tied up in the under-performing loan. Also, make sure to filter for loans that come with a buyback guarantee. A word of warning however, having loans protected by loan originators doesn’t mean much if the loan originator itself falls into financial difficulties, which brings us to our next and most important point….

RISK 4 – Loan Originator goes out of business

This is by far the most important risk when investing in Mintos. If a loan originator goes out of business, you can lose some or all of your money along with it, regardless if your investment is protected by a “buyback guarantee” or not. Don’t think this will happen? It already has – In 2017 Polish lender Eurocent found themselves in trouble and in 2018, they declared themselves bankrupt. We have talked about Eurocent and the lenders we believe are most likely of falling down the same hole in our Mintos review, check it out here!

Firstly, it is important to note that there are a number of inherent systematic protections that Mintos provide before you decide to start investing. These include due diligence prior to accepting new loan originators onto their platform and ongoing monitoring of loan performance. I won’t go into too much detail explaining here as Mintos do an excellent job of this themselves, check out their post here.

Secondly, there are a number of strategies you can implement to reduce your exposure to this risk:

Diversify

“The only investors who shouldn’t diversify are those who are right 100% of the time.”

Sir John Templeton (1912-2008) 

We will never be right 100% of the time! This is investing 101 – Spread your risk around by investing in more than one loan originator. Therefore, when (and I emphasise when, not if) a loan originator goes out of business, your don’t lose all your capital. We recommend spreading your investments across 20 loan originators at a minimum.

Assuming a 12% average return and investments spread evenly across 20 loan originators, this will let you absorb the bankruptcy of a loan originator once every 5 months. As each loan originator represents 5% of your portfolio (100/20), and you earn an average of 1% return every month, this is a very effective investment tool to use.

Research Loan Originators

Invest in solid loan originators that have a low risk of failure. Lucky for you, we’ve already done a lot of the work! Check out our table here – we have gone through the financial statements of each lender and risk rated across several quantitative criteria. We don’t recommend investing your money in any loan originator that scores below 50, as we believe these loan originators are the highest risk of failure or have not provided enough data to evaluate.

Here’s a breakdown of the criteria we used to evaluate lenders. Check out of ratings table here.

Our friend over at The Smart Investor also have a very handy tool that helps filter through Mintos Loan Originators – Check it out here!

RISK 5 – Group Guarantee

Linked with the previous point and a to be honest a risk that often goes unnoticed, a massive risk is that an entity does not have a group guarantee. Without getting in to too much of the accounting or legal jargon, the basic risk is that:

  • 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.
  • An entity in one jurisdiction may be performing well, whereas an entity in another jurisdiction could be falling into trouble. Rather than allowing an under-performing entity be compensated by the “good” performing entity, the group team could simply let the under-performing company fail, along with your hard earned money.
  • Without a Group Guarantee, there is no legal obligation for the company to repay the loans outstanding. The Group can simply continue operating normally as though the poor performing company never existed. If the 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. Check out our table here to see which companies have a Group Guarantee.

RISK 6 – Black Swan Events (All Other)

Ok, so we’ve cheated here slightly. There are countless risks involved in investing and it is simply not possible or an effective strategy to manager all of them. Unfortunately, we can’t plan for every risk or create a risk-free strategy. The sweet spot in investing is about finding how much risk you can tolerate, implement strategies to reduce your risk, and accept events that are outside of your control.

There are countless things that could happen: For example, a change in legal circumstances could render a loan originators business model obsolete, the death of a CEO or leader, a badly implemented strategic move, a company falsifying financial documents or falling into legal trouble, a war breaks out or the company website falls victim of a cyber-attack. As we cannot plan for these risks, we need to simply accept that they exist, be ready to react, and if there is nothing we can do, simply move on.

INVESTMENT STRATEGy

So now you understand the risks and are ready to start investing. But there are so many ways to go about this, so many loan originators to choose from and you don’t know where to start. Let’s simplify it into the 3 invest methods Mintos offer:

A. Manually Picking Loans

Once you click on the invest button on the header of the Mintos homepage, you are presented with thousands of loans to choose from and filters to input, with a primary and secondary market. The primary market is loans offered by loan originators directly, and the secondary market is investors selling loans they’ve purchased and can include a premium or discount.

If you know exactly what you are looking for this is a great strategy to use, however if you are reading this, you are probably looking for some guidance! Manually picking loans is a great place for a beginner to get to grips with the site but it is also a very time consuming strategy – Each loan needs to be manually selected and researched before investing, particularly if investing using the secondary market (Ask yourself, why is someone looking to sell this loan?). A much more efficient strategy is to let the technology do the work for you, bringing us to our next tool..

B. AUTO invest

We’ll keep it brief here as we talk about our autoinvest strategy below…. Our favourite investment tool, the autoinvest feature is perfect for someone looking to earn some passive income but still maintain control of where their investments are going. You can select loan originators, loan terms and acceptable % return parameters amongst others.  

C. Invest and Access

This is a relatively new tool offered by Mintos. According to Mintos statistics:

  • 69% of new investors on Mintos have used this tool to create their investment portfolios.
  • 18% of new investors choose the tool exclusively
  • Average returns are 12.09% on an average investment of 3,969 Euro

Pro’s

The major draw of the tool is that it gives investors the option to cash out at any time they want, at no extra cost. When an investor wants to withdraw money, the tool automatically sells current loans to other investors and credits money to an investor’s account. More than 80% of cash withdrawals from Invest & Access to investors’ Mintos accounts happen in a timeframe of 24 hours.

We tested the tool ourselves and were very impressed. The majority of our loans were sold within minutes of clicking the cash out button, and we didn’t have to wait any longer than 2 months (when the buyback guarantee kicked in for under-performing loans) to be fully divested.

There is also an option to “Pause and reactivate”, offering a good mix of control and flexibility to investors. Mintos are planning on reducing the minimum investment amount from 500 euro to 10 euro, so if you do not have much to invest, you can still use this feature.

Con’s

While the tool is extremely impressive, there are a number of downsides and inherent risks that investors should be aware of:

Control of loan originators invested in:

You do not have control over the loan originators invested in. It is likely that you will be at least partly invested in loans that other investors have been avoiding. When we tested the tool we noticed that we were invested in a number of loan originators scoring below 50 in our rating table (Check it out here!), which is not a position we overly feel comfortable in.

We also noticed that we that we immediately had some investments in late loans – around 15% of our total portfolio. Did anyone else notice this happening? Comment below. We would like Mintos to improve this as it does not make much sense to be invested in underperforming late loans from the get go.

Market Conditions:

As Mintos acknowledge, the tool is only effective in “Normal market conditions”. Abnormal market conditions would be if there was a very large, sudden and extended demand to cash out from Invest & Access. This might be caused by a global recession, an abrupt and widespread loss of faith in investing in loans or a number of other situations. Ultimately this could mean that investors may have to wait until a buyer could be found for their loan shares in their Invest & Access portfolio, or until the loans were repaid over time by the borrowers

OUR (CURRENT) INVESTMENT STRATEGY:

Before we get into it, let’s recap:

RISK WHAT THIS IS STRATEGY TO REDUCE RISK
Portfolio Risk Every P2P platform starts finding itself in trouble – Invest in stocks, gold, bonds, ETF’s, Index funds, etc
Platform Risk One specific P2P platform finds itself in trouble – Invest in several platforms
– Review financial statements to assess long term viability of company
– Check out Brismo site to gauge investor confidence in the platform
Loan Selection Risk The loan you’ve selected is not repaid – Only invest in loans that come with a buyback guarantee
– Diversify by investing a max of 10 euro in each loan
Loan originator selection riskThe loan originator listed on the P2P platform goes out of business – Invest in loan originators that score about 50 in our table
– Spread your investments across minimum 20 loan originators
Group Guarantee RiskOne particular entity for the loan originator goes out of business, while the rest of the business carries on as normal – Same as above
– Invest in loan originators that have a group guarantee or stand alone entities with a solid financial performance.
Black Swan Events All other events Be ready to react. Accept event if you can’t do anything and move on!

So now you understand the risks, lets get into our investment strategy. Feel free to copy ours but now that you understand what the risks are, why not create your own strategy? Everyone has their own risk tolerance, is at different stages at their investment journey and can risk different levels of capital. We would describe our risk tolerance as medium – high, so try find your own risk tolerance and invest accordingly.

Our Mintos investing strategy in a nutshell is:

  1. Using the autoinvest tool primarily, and manually picking loans on occasion.
  2. We set the max amount per loan to 10 euro to reduce loan selection risk.
  3. We set our max loan term to 36 months, so that our capital is not tied up for too long and we can re-assess and adjust for changes in risk profiles.
  4. We want loans that offer any return greater than 10%.
  5. Invest only in loan originators that score above 50 in our table here, selecting a minimum of 20 loan originators at a time.
  6. Invest in Loan originators that have a “Group Guarantee” or the entity itself is performing well.

So there you have it. Everything you’ll ever need to know about everything. Not really! The landscape is forever evolving, Mintos is constantly updating and coming out with new features that bring different risks, and we as intelligent investors need to check in at least every once in a while to see if our original ideas still hold true. Why not save down this link, share and check in again for updates!

Don’t agree with some of our content? Brilliant, we would love to hear your thoughts below (Good and bad!) Our strategy is constantly evolving and you can help plug any gaps that haven’t seen yet.

This post contains affiliate links, some of which include a sign-up bonus for you. These help keep us motivated to producing content such as this so your support is appreciated!

Sign up here with Mintos to receive a bonus on investments made or why not check out our bonus page to see what other offers are currently available!

Mintos Review

mintos

Mintos was established in 2015. Company operations based in Riga, Latvia with a team of 81 people look after the platform. Mintos is the largest P2P platform in the industry and provides a variety of loan types, with returns averaging 12%.

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

*Includes a sign up bonus is on investments made within the first 90 days, based on the amount invested. We will receive a bonus too, thank you for your support!

Why do we like what we like?

1)     Investment Opportunities

Mintos is one of the largest P2P Lending sites available with over €3BLN in loans funded. There are around 600,000 loans listed in the primary market at any one time on Mintos, almost 60 different lenders and around 30 different countries where loans are made. This provides substantial opportunities to investors to diversify their risk.

2)     Buyback Guarantee

The majority of lenders listed on Mintos offer a Buyback Guarantee, reducing the risk for investors to lose their investment.

What does this mean in practice? A buyback guarantee is a guarantee issued by the loan originator to the investor for a loan, that confirms the loan originator will repurchase the loan from the investor if that loan is delayed by more than 60 days.

3)     Secondary Market

If a loan is not performing as expected, or if an investor simply wants their money back, Mintos provides investors with the opportunity to sell the loan to another investor. Not all P2P platforms provide this!

4)     FX Opportunities

Not all lenders are based in euro! In fact, lenders take loans in 12 other currencies including USD, GBP and RUB. To exchange currency without any fees and an attractive FX rate, I suggest using a platform like Currencyfair or Transfermate rather than Mintos itself, where the rate of exchange and fees are much lower compared to Mintos or a normal bank.

Use this link to sign up with Currencyfair and receive 30 euro once transactions over 1000 euro are made! For full disclosure – We will receive a bonus too. Thanks for your support!

Mintos Investments

Why don’t we like what we don’t like

1)     Reliability of Lenders Listed on site

Having reviewed all lenders listed on Mintos, we noticed some inconsistencies on the data available:

  • Only 57% provide audited financial statements. Can we rely on the data provided by unaudited statements? It should be noted however that this has improved from 37% of lenders providing audited financial statements previously. Clearly Mintos are listening to investors and improving where they can.
  • 34% of lenders are not yet profitable, improving from 45%. While it is normal for a new business to be unprofitable for several years, loss making companies increases risk of failure (and ultimately risk of losing investors’ money)
  • 81% of companies have been founded in the last 10 years and have yet to experience a recession. Company failures increase exponentially when credit is tight.

2)     Consistency of financial data available

A common complaint about Mintos is the lack of transparency for loan originators. There is no consistency in accounting standards used, which lets lenders hide the financial data that they don’t want investors to see. We would like to see some consistency here – Have lenders report under IFRS and only accept lenders that have been audited. Otherwise, what stops lenders hiding or manipulating the data they present?

Our own Mintos ratings

We performed a risk rated review of lenders based on the data available and compared this to Mintos lenders. You’ll notice some differences between our ratings and Mintos!

LAST UPDATED: October 2019

Company NameMintos RatingsTotal out of 100AuditedProfitableGroup GuaranteeDo they pay interest on delayed payments?Based on Financial Data
MogoA92YesYesYesNo31/12/2018
1PMA87YesYesNoNo31/05/2018
BanknoteA-87YesYesYesYes31/12/2018
ViziaA-86YesYesYesYes31/12/2018
CreamFinanceB80.75YesYesYesCreamfinance Czech s.r.o.: Yes
Creamfinance Denmark ApS: Yes
Crediton LLC: Yes
SIA Creamfinance Latvia: No
Creamfnance Sp. z o.o: Yes
31/12/2018
CredissimoA-79YesYesNoYes31/12/2018
Dziesiatka FinanseB-79YesYesNoYes31/12/2018
LutecreditB+75YesYesYesYes31/12/2018
ID FinanceB74.83YEsYesIDFinance Spain, S.L.: No
MFO OnlineKazFinance LLP (Kazakhstan): Yes
IDF CAPITAL, S.A.P.I DE C.V., SOFOM E.N.R.: No
Yes31/12/2018
EBV FinanceA-74YesYesNoNo31/12/2018
BB Finance GroupA-72YesNoYesYes31/12/2018
CrediusB+72YesYesNoYes31/12/2018
Everest FinanseA-72YesNoNoYes31/12/2018
AgroCreditA-71YesYesNoNo31/12/2018
CashCreditB70YesYesNoNo31/12/2018
AkulukaB+67YesNoYesYes30/12/2018
Capital ServiceB+65YesNoNo Yes31/12/2018
CreditstarB64NoYesYesYes31/12/2018
Placet GroupB64NoYesNoYes31/12/2018
Watu CreditB64YesYesNoNo31/12/2018
Capitalia B+63.5NoYesCapitalia Finance OU: Yes
AS Capital: No
Capitalia Finance UAB: Yes
No31/12/2018
SimboB-63YesYesNoYes31/12/2018
Kredit PintarB+62NoYesYesYes31/12/2018
VarksB+62YesYesNoYes31/12/2018
EcoFinanceB61YesYesNoYes31/12/2018
AcemaA-60NoYesNoNo31/03/2018
ITF GroupB-60YesYesNoYes31/12/2018
ExpressCreditB-58.5YesYesNoYes31/12/2018
DebifoB53YesNoNoNo31/12/2018
AlfakredytB51NoYesNoYes31/12/2018
KvikuB51YesYesNoYes31/12/2018
Extra FinanceB50YesYesNoYes31/12/2018
LimeB49YesYesNoYes31/12/2018
SOS CreditC+49YesYesYesYes31/12/2018
Mikro CapitalA-48NoYesNoYes31/12/2018
MonegoC+48YesNoNoYes31/12/2018
DineriaB-47NoYesNoYes31/03/2019
NovaloansB+47NoYesNoYes31/03/2019
StikcreditB-47NoYesNoYes31/12/2018
Dineo CreditoB-46NoYesNoYes31/12/2018
DozarPlatiB-43NoYesNoYes31/12/2018
TigoC+42YesNoNoYes31/12/2018
Aforti FinanceC+41YesYesYesNo31/12/2018
PeachyB41YesNoNoYes31/12/2018
Kredit24C+40YesNoYesYes31/12/2018
SeboB-40YesYesNoYes31/12/2018
HipocreditB-39NoYesNoAS Hipocredit: Yes
UAB Hipotekiniai kreditai: No
31/12/2018
Mozipo GroupB-39NoNoYesYes31/12/2018
CashwagonB-38NoNoYesYes30/04/2019
RapidoB-38YesNoNoYes31/12/2018
FireofB37NoYesNoNO31/03/2019
CreditlikemeC+36NoYesNoYes30/03/2019
LFTechB-35NoYesNoYes31/12/2017
EcashC+32YesNoNoYes31/12/2018
DineroB-30YesNoNoNo31/12/2018
KredoC+30YesNoNoYes31/12/2018
LendrockB-29NoNoNoNo31/12/2018
GetbucksB28NoNoYesNo31/12/2018
AlexCreditB-27NoYesNoYes31/03/2019
EstoB-27NoYesNoYes31/07/2019
KukiB-27NoNoNoYes31/12/2018
Zenka FinanceC+27NoYesNoYes31/08/2019
AasaB26NoNoAASA Polska S.A – No
AASA Kredit Svenska AB – Yes
Yes30/06/2017
LengoC+21YesNoNoYes31/12/2017
RapiCreditB-21NoNoNoYes31/12/2018
MetpokpeantB-20NoNoNoYes30/06/2019
TengoB-18NoNoNoYes30/09/2018
EurocentD11NoNoNoYes31/12/2017
BinoB-0NoNoNoYes31/12/2017

How did we do this? We mined the data available, studied the financial statements, and basically looked at all the boring stuff! We rated each lender across a number of criteria, with a higher weighting given to what we considered to be more important:

Do you agree or disagree with our ratings or weightings? Let us know why in the comments!

We have recently updated out rating criteria to include “discretionary” points, allowing 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.

5 of the Best – The Safest Lenders on Mintos

Although investing always comes with a certain level of risk, having performed our own research we have listed the safest lenders on the site at the minute, and this is where the majority of our capital is invested. Beyond the quantitative measures, we like to focus on qualitative areas such as management team , strategy and processes, details of which we have outlined below.

Why do we care about the loan originators? The loan originators guarantee the loan, not Mintos! If a loan originator goes out of business, your capital is at risk. We believe these companies are stable and have the lowest risk of going out of business

Company NameMintos RatingsOur total out of 100Skin in the GameFoundedAverage Return on InvestmentEmployeesCountryAuditedFinancial Y/ENet Profit in EuroNet Profit Margin %Current RatioDebt to Asset Ratio
1PMA8810%200011.30%180United KingdomYes31/05/20185,621,707 18.731.060.70
BanknoteA-845%200911.20%305LatviaYes31/12/20184,776,590 26.571.550.78
Dziesiatka FinanseB-8410%200113.90%440PolandYes31/12/2018614,665 25.2310.260.56
MogoA837.5%201211.60%275SeveralYes31/12/20184,642,746 8.541.670.91
ViziaA-835%200911.00%305LatviaYes31/12/20184,776,590 114.101.591.00

Background:

A UK bases company, 1PM is one of the strongest and most reliable lenders listed on Mintos. The company has had a number or recent acquisitions (7 in total including 4 in 2017),  and targeting more M&A activity with a buy and build strategy. 1PM focus on lending to SME’s including asset finance, loan finance and invoice finance. It boast an impressive track record of 75% recovery of bad debts with its current credit recovery process.

People:

CEO: Iain Smith joined as CEO in February 2014 and has 32 years of experience, with a variety of CFO and CEO experience. He attended university in the University of York, where he received a BA in Economics and Politics.

CFO: James Roberts joined as CFO in May 2017 and has 18 years experience. He is a qualified Chartered Accountant and his background is in the accounting and finance industry, holding a number of financial positions across various companies.

Background:

Based in Riga Latvia, Expresscredit is the parent company of Banknote and Vizia, both of which make our top 5. Banknote provides services including consumer loans, pawn loans, and money transfers, and Vizia focuses on consumer loans. Expresscredit was established in 2009 as a pawn shop, growing ever since and joining Mintos in 2016. Expresscredit holds 5.8% of the market share in Latvia, targeting growth in the consumer loan and pawn loan segments.

People:

Agris Evertovskis (Chairman and Co – Founder) was born in 1984. He graduated from the Stockholm School of Economics is Riga in 2006, worked in the Commercial real estate sector and founded Expresscredit in 2009, where he has remained ever since.

Didzis Admidins is the CEO of the company and a member of the board. He was born in 1984 and holds a masters in Economics.

Background

Polish based company that focuses on personal loans with a lending term up to 2 years. Targeting expansion in new business lines including real estate and car dealerships and plans to expand online and outside of Poland, beginning with Spain. Currently boasts an impressive 3.95% financial loss ratio on loans issued.

People:

Tomasz Bracki (President of the Management Board): Lawyer with 3 years’ experience in Financial Services and another 10 in marketing industry. Joined in August 2018.

Jerzy Mazurek (Vice President of the Management Board): Lawyer and legal background. Previously president of a polish debt collection company, which helps to explain the impressive debt recovery record. Joined in February 2018.

Background:

Mogo is registered in Luxembourg and focuses on vehicle finance leases and sales and leaseback up to 15k euro, with vehicles secured as collateral against the loan. The company currently operates in 14 countries globally, focusing on the eastern European market.  Mogo also provide consumer loans up to 3k euro in Latvia, Estonia and Armenia, where the majority of the loan portfolio is currently based (53% of total loans).   

People:

Modestas Sudnius (CEO): Internally promoted to CEO having worked with the company for over 5 years, starting as the country manager for Lithuania. Previous professional experience includes over 10 years working with international organisations. Graduate of Management program in ISM and holds a masters degree issued by the Stockholm School of Economics.

Maris Kreics (CFO): Joined Mogo in 2015 having come from a financial background, working with PwC for 7 years and in Corporate Finance for 2 years. Maris has obtained the notoriously difficult CFA Charterholder and is a qualified accountant having obtained his ACCA accredited.  

Predicting the next Eurocent – 3 Lenders you should avoid

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. Click here to see the latest on Eurocent.

Eurocent is a perfect example of the risk investors face when investing on P2P platforms. Loan Originators can and will continue to go out of business, leaving investors with a stack of loans that will not be fully repaid. We have risk rated each lender on Mintos in the table above and suggest avoiding those that have scored below 50.

Listed below is the worst offenders on Mintos – i.e. Lenders we believe are most likely to fall the way of Eurocent:

Company NameMintos RatingsOur total out of 100Skin in the GameFoundedReturn on InvestmentEmployeesCountryAuditedFinancial Y/ENet Loss in EuroNet Profit MarginCurrent RatioDebt to Asset RatioOur total out of 100
TengoB-2310201713.90%296KazakhstanNo30/09/2018-309,771 -7%Not GivenNot Given23
BinoB-2210201712.20%24LatviaNo31/12/2017-2,021,063 -127%0.771.2722
GetbucksB225201111.40%800Botswana, Kenya, Zambia, South AfricaNo31/12/2018-9,949,578 -13%0.860.9222

A loss making Kazachstan based company founded in 2017 does not inspire confidence for us as investors. Couple with this, a managing director with just 5 years professional experience leading the company, we suggest avoiding loans provided by this company.

Another loss making company founded in 2017, Bino has not released any financial information since 2017. The founder and CEO graduated from university in 2012 and although he has 10 years’ experience in the Fintech space, it is as yet unproven if he can turn this company into a long lasting venture. The risk here is simply not worth it for us, given that there are less risky investments available.

Trading primarily out of Africa and racking dismal loses of over 8,000,000 euro, the Frankfurt Stock Exchange listed company is trading near all time lows on the stock market. The company seems to be more focused on growth rather than consolidating current markets and turning them profitable, a high risk strategy that we as investors do not want to be part of. Looking at the Financial Statements, it appears that the company is staying afloat by taking on a significant amount of debt (Financial borrowings of over 83M euro, debt to asset ratio of 0.92), and when Getbucks fails to meet some of the covenants attached to these borrowings, it could spell the end for the company.

OVERALL CONCLUSION

OUR MINTOS RATING: 9/10

We believe that Mintos is one of the best platforms available at the minute. For both beginners and seasoned investors, Mintos provides an opportunity to make a very attractive rate of return with an easy to use platform. The fact that we are able to perform reviews such as these speaks volumes to the site – It really is miles ahead of competitors at the minute in terms of transparency and investment opportunities, We suggest investing capital in stable companies with a high rating, above 50 at a minimum – see table above.

We would like to see Mintos continue to set the standard in the P2P industry in terms of the lenders accepted onto the platform, and transparency of financial data.

Wondering what investment strategy to use for Mintos? Or what risks you should be focusing on? Why not check out our investment guide here!

Our friend over at The Smart Investor also created a handy tool that helps to filter through Mintos Loan Originators to help find the one that is right for you – Why not check it out here!

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

This post contains affiliate links, some of which may include a sign-up bonus for you. These help keep us motivated to producing content such as this so your support is appreciated!

Hold tight….
Success! You're on the list.