Last updated - 14 August 2023
Mintos lenders can default or close down - choosing the best lenders is important
In 2017, Mintos lender Eurocent failed, and defaulted on its Mintos ‘buyback guarantee’ commitments. Since then there have been defaults and issues with several other lenders. Over the last 5 years we have been providing the scores and data on this page – our Mintos lender ratings. Our goal is to provide investors with key information on each lender, and a rating score to help highlight those that are lowest and highest risk.
To begin with, below we discuss some recent events:
Mintos cuts a deal with a Russian lender - investors take a 35% loss
Mintos has announced that one of its Russian loan originators, Revo Technology, has exited the Mintos platform, following a negotiated settlement. Payments outside of Russia have been heavily limited by local authorities, which has resulted in many Mintos investors receiving either nil or minimal payments from the Russian lending groups that owe them funds.
Revo Technology presented an offer to Mintos to pay 65% of the balances owed, in return for a ‘haircut’ or write-off of the remaining 35%. Mintos says that this 35% haircut was a requirement introduced by Russian authorities to approve a bulk payment transfer (it would be interesting to know how this 35% windfall gain is being split between Revo and the Russian authorities). While taking any loss is annoying for Mintos investors, in our view this was probably the correct action to take – the alternative would have been an extremely long and uncertain time period to recover more than this amount.
One interesting outcome is that the 35% loss is being applied equally across all Mintos investors. We think this is a lot more equitable than what Mintos has done previously, where they paid out some investors in full, and wiped out others, based on the maturity dates of the loans they held. This never made sense to us and we are glad that they have changed their approach to distributing work-out recoveries.
Mintos updates its ratings
Withholding taxes reduced from 20% to 5% - check your account status
One of the impacts of Mintos moving to a regulated notes structure was that it had to levy withholding taxes at source. This was one of the biggest downsides that we noted when in our post about the changes.
In welcome news, Mintos has announced that it has been able to reduce the withholding tax rate from 20% to 5% for EU and EEA residents. If you qualify, it is important that you make sure that you have provided any information that Mintos require to set you up on the 5% rate, and check that it is activated.
Why is the reduction good for investors? Some investors may have an effective tax rate below the 20% level, and this withholding tax deduction may reduce the amount of tax they pay overall. Even if you pay high rates of tax – the move is beneficial. That’s because more of the interest earned can get reinvested throughout any tax year, leading to higher interest income being earned after tax.
Mintos finally launches its Notes program. Forced to close secondary market
After several delays Mintos has announced that it has launched its notes program. The notes program is designed to replace the current arrangement where it sells participations in loans, and is linked to its move to become a licenced investment platform. Initially there will be 3 companies issuing notes – CashCredit, Eleving and Sun Finance Latvia. While Mintos is highlighting some benefits to investors from notes relating to protections and transparency, there seem to be several downsides. One topic that has understandably upset many investors is the imposition of withholding taxes on interest earnings for the first time. We plan to write a post that discusses this in more detail shortly. Another huge downside relates to the secondary market – Mintos is being forced to close the secondary market in claims by 30 June. While a secondary market in notes will be possible, cutting off the liquidity options for over €670 million of claims that are currently outstanding is a huge negative. We hope Mintos makes investors more aware of the situation as this detail appears to have been lost in their communications.
Check out our new post that discusses the implications for investors of the new Mintos notes scheme – the key benefits, and 4 important downsides to be aware of.
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 (profits annualised where appropriate):
Note: S = Suspended D= Defaulted W = Solvent windown
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 changed their ratings system, which is now a number from 0-10. A W/D indicates that Mintos has withdrawn their rating.
Consider country risk too
Key updates: July / August 2023
Key updates: May / June 2023
Key updates: March / April 2023
Key updates: January/ February 2023
Key updates: December 2022
Key updates: November 2022
Key updates: October 2022
Key updates: August & September 2022
Key updates: June & July 2022
Key updates: May 2022
Key updates: April 2022
because a guarantee from a company is not as strong as a direct claim. Originally we understood that ‘Financiera Contigo’ was a sister company or subsidiary, but the Mintos team kindly reached out to us to explain that it is just a brand used by CEGE itself. Based on our review of the latest audited financials for CEGE, and their track record, we have assigned a score of 63 to Financiera Contigo / CEGE.
Key updates: March 2022
Key updates: February 2022
Key updates: January 2022
EstateGuru is an excellent site that offers loans secured on real estate. Rates are high - around 11%. Currently mainly focused on the Baltic region of Europe but with plans to expand into other countries.
Robocash is an international lending group that offers loans via its own P2P site. We like Robocash because the lending group is extremely profitable, and the site offers high returns (9-14.5%)
Bulkestate is a small but growing site focused on loans secured on real estate. It offers loans secured by real estate. Their rates are the highest in Europe for secured loans currently (11-14%)
October is focused on lending to small businesses in France, Spain and Italy. Rates are often a little lower than the other sites we list here, but some investors will like October due to the countries it operates in.
All information published on ExploreP2P is subject to important disclaimers contained on our legal page here. No liability is accepted for the accuracy or otherwise of any information, scores or views published, and any direct or indirect losses are expressly disclaimed.