Last updated - 12 June 2019
Mintos lenders can default or close down - it has happened before
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. Other lenders have been quietly removed from Mintos recently, with the lenders closing down their operations – including Dindin and BIG Microfinance. We had raised concerns about both of these companies – thankfully Mintos lenders were repaid in full in these cases.
These events have inevitably led investors to pay more attention to the quality of the other lenders on the Mintos platform. That led us to create 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.
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 December 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 (profits 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.
Our views on the new lenders
The most recent lender to Join Mintos is a Spanish auto lender called Lendrock. The business model seems promising however it is currently extremely small with a limited track record. Our initial score is 41. In May a tiny lender from Mexico called Dineria joined Mintos. We are really not sure how they qualified to join Mintos given that they have less than €2m of loans, and have negative equity. We awarded them a score of only 12/100, and Mintos has awarded a rating of only B-.
Another recent lender to join is Indonesian Fintech lender Kredit Pintar. Kredit Pintar reports that it had a very profitable first year of operations (which is a little surprising for a new business) and a strong capitalisation (equity is much higher than its loan book). We note that it is backed by some well known investors and its app is highly rated by customers on the Google Play store. It has achieved an initial score of 66, which should increase in the future as it builds a longer track record and provides more financial information about its business. Mintos gave it a B+ rating.
In February 2019 a profitable lender from Spain joined Mintos – Dineo. Dineo achieved an initial score of 60. Once it publishes its 2018 financials, and improves its financial disclosures, we think this score will improve. The most recent lender to join was Mikro Capital from Russia. Mikro has good capital ratios and a reasonable size, however its earnings have been weak in the last two years, barely breaking even. Its initial score is 47.
In January 2019 Mintos introduced a company from Kosovo, called Monego. It was similar to many other lenders who have joined the platform recently, being a new lending business with next to no track record, operating in a small country. It achieved a score of 39, which is slightly higher than may be expected, but it currently has strong capital ratios. We also like that it has been described as a ‘related party’ of Mintos as we think Mintos is less likely to allow its investors to suffer a loss in this situation if the company is not successful.
In December 2018 Mintos introduced Peachy from the UK (17/B), and Efaktor (45/B-) from Poland. We find it difficult to understand how Mintos was able to assign a ‘B’ rating to Peachy. It is a business with a track record of losses, and it currently has a negative equity position (it owes more money than it has in assets). There is a lot of volatility in their past financial figures that has not been explained anywhere adequately. We are more positive on Efaktor. This is a factoring business that has demonstrated stable performance and has moved into profitability as it has grown. The reason that it has not achieved a higher rating is that it is one of the more highly levered businesses listed on Mintos, with only 6.3% of equity backing for each loan that is held compared to the average of 34%.
Recent rating changes
Varks.am has just achieved our biggest ever sing rating upgrade – from 18 to 61. This achievement was due to moving from a small loss in 2017 to a strong profit in 2018. It also issued new equity in 2018, strengthening its balance sheet. Creamfinance has been upgraded from 60 to 67 after moving back into profit in 2018. British lender 1pm plc had a slight upgrade, and Capitalia had no movement in its rating.
Sebo is another lender to recently score a significant rating upgrade following the release of their audited 2018 financials. The business is performing well, and is profitable. Sebo’s rating score increased from 21 to 53, with potential for further improvement in 2019 if performance continues to be good. Sebo lost points because it paid out most of its 2018 profit as dividend, which is unusual for a growing, early stage business.
Mogo is one of the most important lenders operating on the Mintos platform. Mintos does not publish regular financial information about Mogo, but their latest reports can actually be found here. Following our review of the Q4 18 results we have downgraded our rating further from 73 to 71 (their score was 83 a year ago). While we are not particularly concerned about Mogo yet, we do note that their profitability has fallen in 2018 considerably due to rising default rates. They have also been growing strongly, which is stretching their balance sheet.
Another notable downgrade was to GetBucks/MyBucks which has continued to decline this year with a current score of only 20. Frankly, their operating results continue to be terrible, with a €14.7 million loss attributable to shareholders in the year to December 2018. MyBucks now has a negative equity position. It has been heavily loss making in the last 2 years but has not raised any new equity. In our past post 7 signs a lender may be heading for disaster, we recommended looking at following the trading prices of any securities issued by Mintos lenders. The share price of MyBucks is currently €0.90, a fall of 94% since May 2018. The heavy losses, and dramatically falling share price indicate that things may not be going totally to plan for the group, and investors should be very cautious about the situation, and think many investors will look to sell any loans until the situation becomes clearer.
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.