Last updated - 6 October 2018
A Mintos lender blew up last year
In 2017, Mintos lender Eurocent failed, and defaulted on its Mintos ‘buyback guarantee’ commitments. This is likely to lead to signifcant losses for Mintos investors as a high proportion of Eurocent customers defaulted on their loans.
This has inevitably led investors to pay more attention to the quality of the other lenders on the Mintos platform. Last year, we listed 9 lenders that we would not touch right now. We have now broadened our analysis to cover all of the Mintos lenders. We highlight the lenders with the strongest features.
It has been difficult up to now to compare each lender on the Mintos platform
Unfortunately, the information provided by Mintos about each lender is not consistent. Some lenders have not provided any information since March 2016. Others provide very regular updates. Information is provided in different currencies, languages and accounting policies. The quality of information provided varies enormously. Some information is audited, in many cases it isn’t. There should be minimum standards of reporting and disclosure. At the moment, Mintos allows the lenders to choose what they disclose. This results in lenders failing to disclose important information that may not be convenient for them, such as a history of losses, or rising levels of bad debts.
Key financial information of each Mintos lender
The table below captures the key financial information for each lender. This can be useful to quickly lookup the profile of each lender, and compare the strengths and weaknesses of each one.
All Figures in EUR million (annualised where appropriate):
Our Mintos lender ratings
Our Mintos lender ratings are based on 5 characteristics – profitability, capitalisation, size, track record and the quality of their reporting. We have allocated marks out of 20 for each metric, giving a total score out of 100. Mintos have recently introduced their own ratings – from A (best) to D (default), which we have included as a comparison.
Top rated Mintos lenders
Mogo and ID Finance earned the equal highest scores. Mogo is a popular lender on Mintos as the loans are both secured by vehicles and most receive buyback guarantees. Mogo has been reporting good results up to Q3 17. Mintos have informed us that they will publish updated results shortly, but performance remains good. ID Finance is another lender that is well capitalised and has produced strong results over the last 2 years.
We think investors can have some confidence in any lender achieving a score of 60 or better. Lenders meeting this benchmark include Credissimo, 1pm plc, Credit Star, Capital Service, iute Credit, Vizia/Banknote, Cream and IFN Extra Finance.
Our views on the new lenders
The Most recent two lenders to join Mintos are Leaselink, and Tigo. Leaselink is a subsidiary of a larger Polish lending group called Pragma. Their lending product looks innovative, however there is relatively little track record. We have scored the business as 62 on the basis of the financial strength of its parent company. Tigo is a startup lender operating in Macedonia. This is a very small lender in a very small market, and we think it represents a high risk investment, with a score of 26. Mintos appears to agree with us as they have given Tigo a rating of C+. There are better opportunities elsewhere.
Lenders that have joined during 2018 and scored well include tech focused lender Credissimo (85), British lender 1pm plc (77), small but profitable lender Lime Loans (73) and Placet Group (71) and Credius (70).
Many of the other lenders that have joined are high risk, as many have poor financial disclosures, weak balance sheet structures, a history of losses, and are exposed to currency risks.
We are surprised for example, that a company like Bino, that only started lending in 2017 would be invited onto the Mintos platform, particularly when no information about the capitalisation of the company is available. Several companies have not provided any information on their profitability, which implies to us that they are likely to be loss making currently. It is almost impossible to determine how likely these businesses will be able to honour their buyback guarantees in the future.
In May 2018, Mintos introduced Mexican lender Credilikeme, which scored one of our lowest ever ratings at 18/100. The presentation provided by Mintos is from 2016, however we can see that in the last 2 years the company has made heavy losses, leading to a non-performing loan ratio of 85% in Dec 2017. We continue to be very wary of companies like this that are very small, are experimenting with high risk lending products, and have a fairly poor track record. Frankly, we don’t think they should be given access to the Mintos platform, and some are at high risk of failing in the future.
Recent rating changes
In July 2018, several lenders published new financial reports, which has resulted in several rating changes. Lenders with rating upgrades included iute Credit (up 7 to 69) and Debifo (up 9 to 34). Lenders with notable rating downgrades included Capital Service (down 10 to 62), Mozipo Lithuania (down 9 to 47), Cash Credit (down 7 to 35) and BIG Microfinance (down 5 to 54).
Now you’ve reviewed our latest Mintos lender ratings – what’s the fastest way to choose the best loans on the Mintos Primary Market? Check out our new Mintos Loan Scanner page, which allows you to compare very quickly the current interest rates, loan availability, and ratings for each lender on the platform. We will keep it updated, so check it next time you are thinking of buying more loans, or adjusting your auto-invest settings.