Last updated - 19 February 2020
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. This is likely to lead to signifcant losses for Mintos investors as a high proportion of Eurocent customers defaulted on their loans. Since then there have been defaults and issues with several other lenders, including Aforti and Rapido.
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.
Below we discuss some of the recent loan originators that have defaulted, or are likely to. Check out our new post where we discuss this trend, and the 5 things Mintos investors should know.
Can Finitera afford to buyback €8 million of Monego's bad loans next month?
On 6 December 2019 Mintos announced that Iute Credit and Monego both lost their lending licences in Kosovo. The Governor of the Central Bank of Kosovo has cited high interest rates, and a deviation from business plans, as the reason for revoking the licences. In total there are currently €16 million of Kosovo loans outstanding from these two lenders. Mintos suspended trading in both the primary and secondary markets for these loans.
Iute Credit have been honouring the buyback guarantees for all loans falling 60 days in arrears (which it was required to do under the group guarantee provided). We had expected Iute to be able to fulfil its obligations (as Kosovo is a small part of Iute Credit’s operations, and is a profitable company) but we are still glad to see that this has been happening.
Mintos made another announcement relating to Monego that seemed great for Mintos investors, but raised a lot of questions about what is actually going on in the background. A mysterious company called Finitera, was planning to acquire Monego, but did not do so prior to them losing their licence. Regardless, Finitera was planning to ‘cover scheduled borrower payments to investors having investments in Monego loans once these payments are delayed for 60 days‘. As of 4 February, €300k of 60+ Monego loans had not yet been repurchased by Finitera, and a further huge €8 million of loans were reported as being 30-60 days overdue and will likely need repurchasing in February or March. That represents a very large upcoming buyback commitment for Finitera in the coming month and will be monitoring developments closely.
Mintos finally announces some progress with Aforti, following their default
On 7th August 2019 Mintos announced that it was suspending primary and secondary market loan purchases relating to Aforti Holdings of Poland due to non-payment of collections to Mintos. Very little progress had been made since then on resolving the situation. It seemed to us that Mintos had to decide whether investors were going to be better off pushing the company into bankruptcy, or finding a negotiated, but not ideal solution. On 5th February 2020 Mintos announced that an agreement had been reached. Under the terms of the deal, Aforti will make payments each month until February 2021 that will cover all the amounts owed (€2.1m). The initial payments will go to Mintos itself, and the remaining ones will be paid to their investors from the end of March 2020. Aforti have also provided €1.9m of collateral if Aforti defaults on its obligations. We don’t understand why it took so long to negotiate this transaction. Lessons will have been learned. However overall we this as a fairly good outcome for the affected Mintos investors.
Metrokredit situation seems to have been resolved. Rapido files for bankruptcy
On 8th November Mintos reported some concerning news about Russian lender Metrokredit. It seems that the business had lost its licence to lend to new customers, and the existing portfolio will be put into run-off. Mintos stated that they had downgraded Metrokredit from B- to C because of their new ‘limited competitive position. We had given Metrokredit a score of 11/100, one of the lowest on our tables. Since then, Mintos disclosed that Metrokredit is part of the Finko lending group, which owns several other lenders appearing on Mintos and that ‘some of the Finko and Mintos equity investors overlap’. Finko would honour Metrokredit’s buyback obligations. We noticed recently that loans issued by Finko in Russia were now available again on Mintos. We have been informed by Mintos that Finko has its own lending licence in Russia and is using this to issue these new loans. It seems a very strange situation, with only partial information being provided to Mintos investors, but overall it appears that Mintos investors are being left in a much better situation than it appeared a couple of months ago, and losses will be avoided.
The most recent lender to default on Mintos was Rapido. Mintos has issued a notice of default (see their announcement here). On 22 October Mintos announced that it was downgrading Rapido from B- to C because of a business strategy change that had affected profits. Strangely, on the very next day it announced a suspension of Rapido loans because the lender had stopped sending repayments to Mintos (i.e it had defaulted on its obligations). Our rating of Rapido was 16/100, one of our lowest scores. Why? The business had been consistently loss making over three years, had negative equity, and a very small loan portfolio. Thankfully, the amount of loans outstanding on Mintos is reported to be relatively small, so this should not affect most investors too heavily – around €0.5 million of loans appear to be affected by this default. Inf February 2020 Rapido filed for bankruptcy in Spain. We expect very little of the outstanding funds to be returned to Mintos investors, if any.
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 - February 2020
Latest rating changes - January 2020
Latest rating changes - December 2019
Latest rating changes - November 2019
Latest rating changes - October 2019
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