Last updated - 6 September 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.
New potential default - Aforti
On 7th August 2019 Mintos announced that it was suspending primary and secondary market loan purchases relating to Aforti Holdings of Poland. You can read the statement here. It appears that the lender has failed to pass on some borrower repayments to Mintos, most likely due to liquidity issues. This unfortunately appears to be a very similar situation to Eurocent, which is still unresolved and proceeding through the Polish bankruptcy process.
We have been expecting a new default to come from Mintos lenders for a while now, but we are slightly surprised that it is Aforti that has been the next lender to run into issues. They had scored 50/100, not a high score, but there are more obviously risky lenders out there. Their most recent report showed a profit in Q1 2019, following an underlying pre-tax profit (before goodwill write-off) of almost €1m in 2018. Reporting quality was much better than average, with up to date presentations and audited financial statements. Their stock price remains high and apparently unaffected by the Mintos announcement. Aforti’s leverage was however higher than average and for now we see this as potentially the most likely the reason that they may be experiencing funding difficulties.
For now Mintos investors with Aforti loans in their portfolio have to wait to get more information to understand the situation better. There is still a possibility that Aforti can source further capital and/or liquidity and this may be a temporary issue. We understand meetings are being held this week with Aforti management to discuss the situation. Unfortunately our current assessment is that the firm is most likely to be put into runoff. Why? Once a small firm like this loses the confidence of funding partners like Mintos, and liquidity issues are made public, without shareholder support it is very difficult to find alternative funding and avoid an insolvency procedure. This will in our view most likely lead to losses for Mintos investors and a delay in recovering their investments.
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.
Latest rating changes - September 2019
Latest rating changes - July/August 2019
Our views on the new lenders
In June 2018 Mintos introduced a British lender – Novaloans. The business is extremely small, but has a good profit history over the last 2 years. If it was much larger we would be very positive about the business but its initial rating is only 51. Mintos also introduced Ukrainian lender Alex Credit. The business is extremely small, with a loan portfolio of only €3 million, however it is profitable. Its initial rating is 41. Another new lender is a Polish lender called Dziesiatka Finanse. Unlike many lenders on Mintos it has been operating for 8 years. The main downside again is that it is very small. It is however part of a larger group (although it does not receive a guarantee from the group). Our initial score is 62. In June Spanish auto lender called Lendrock also joined. 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-.
A recent lender to join that has scored well 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.
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.
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.
Viventor is a similar site to Mintos, just smaller. Some secured loans are available. We also provide Viventor lender ratings.
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.
Peerberry offers loans from multiple lenders. Rates are usually around 12%, and most loans have buyback guarantees. The site is easy to use and has a great design.
Lenndy is another multi-lender P2P investment site. It is much smaller than Mintos, but it has an interesting range of loans. Many have high rates, with buyback guarantees