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Who is Mintos?
Mintos is a global online crowdlending marketplace for loans. It was founded in 2014 and has their main office in Riga, Latvia. They currently have offices in Warsaw and Mexico City as well and are planning to expand to several other countries soon. Over the few years in business, Mintos received many fintech and startup rewards. Mintos became profitable within a few years and is today the leading peer-2-peer platform in Europe.
Mintos was the second crowdlending platform I started using and it quickly became one of my favorite platforms. If I could only choose one platform to use, my choice would be Mintos. It was the biggest part of my portfolio for a long time. The best part about Mintos is the diversification options and the detailed auto invest functionality. The platform is connected to a large number of loan providers and more are frequently added. Mintos also rates each single loan provider for their financial and operational stability. This is not something that is common on crowdlending platforms and is very helpful when deciding what loan providers fits your personal risk profile and should be added to your portfolio. You can read more about the Mintos Ratings here. The loan providers are supplying loans in countries all over the world. The loans span over direct to personal unsecured consumer loans, secured car loans, invoice financing, agricultural loans, secured car loans, mortgage loans, pawnbroking loans and small business loans. Only very few loans does not offer buyback guarantee and there are great opportunities to tweak your auto invest on many parameters, to get the most out of your invested funds. On top of that, many loans on the platform are also secured in some kind of hard asset. This could be a car, a motorcycle or a property. The loan originator can sell the asset and distribute the funds to the investors in case of a default. This helps lower the loss for the investor significantly. The high availability of loans also means that there is hardly any cash drag on the platform. You can invest in loans using many different currencies. However, I stick only to loans in euros. The platform is very well designed, easy to use and is available in many different languages.
Auto Invest – what is it and why should I use it?
Auto Invest is the single most popular feature of the Mintos marketplace — more than 75% of investors actively use it. Auto Invest automatically implements your chosen investment strategy. After you have entered your investment criteria, Auto Invest will automatically invest in suitable loans. You can access Auto Invest at any time and follow your portfolio activity in real time to make sure it is working according to your investment goals. Auto Invest is a very efficient tool for saving time spent on investment activities. It also allows you to access newly placed loans in the system before manually-made investments. Once you have confirmed your investment criterias, Auto Invest will review loan listings and invest funds in loans that meet them. Auto Invest will then continue to automatically analyze and invest in suitable new loans as soon as they are listed. If you change any Auto Invest setting, all available loan listings will be rechecked to make sure they meet your investment criterias.
What if I need my money back quickly, when my funds are invested?
This is another area where Mintos is really strong as a platform. Mintos has a huge secondary market! If you do not have the time to wait for your loans to mature and need to liquidate some or all of you funds quickly, you can easily do so by selling your investments at the secondary market. By the click of a button you can put you all or some of your investment for sale, either at cost or at a discount. Other investors can then buy the investments from you, either manually or via Auto Invest. This is what makes Mintos a well established marketplace for loans and makes it stand out from the crowd on yet another parameter. I have not come across a secondary market of this size on any other platform.
Buyback guarantee and how it protects your investments.
If a loan comes with buyback guarantee, which is the case for almost all loans on the Mintos marketplace, the loan originator guarantees to buy back loans that are 60 days late. This reduces the risk of you as an investor losing money if the borrower does not repay their loan. If you are using the auto invest it is easy to set up you strategy to only invest in loans with buyback.
What happens to my invested funds if Mintos goes bankrupt?
In the unlikely event of Mintos going bankrupt, investors will be given full information from the Mintos database on the loans they are invested in. The Mintos liquidator or administrator will take all necessary actions to transfer the servicing of all loans to an new appropriate manager. In order to ensure that this can happen in a proper manner, Mintos and the law firm FORT have entered into an agreement under which Mintos transfers data each month, containing all current data from Mintos to FORT to secure the data for storage.
What happens to my invested funds if a loan originator goes bankrupt?
Each loan originator is required to keep a certain percentage of each loan they place on Mintos on their balance sheets. This is also called skin in the game. This ensures that the interests of the investors are closely aligned with the interests of the loan originators. Before a loan originator joins the platform, Mintos perform a thorough due diligence before connecting them.
In the very rare event that a loan originator goes out of business or becomes insolvent, Mintos has put in place arrangements to ensure that investors continue to receive payments on the loans in which they have invested on the Mintos marketplace. What happens to your invested funds if a loan originator becomes insolvency is different depending on the loan structure. On Mintos, there are two types of loans – loans with the Direct and Indirect Structure. You can select which loan types you would like to invest in using the “Investment Structure” filter on the Primary and Secondary Market. You can see a great compact overview of the loan structure for all loan originators on Mintos use here.
In case of a Direct Loan Structure.
As per the assignment agreement and cooperation agreement with Mintos, in the event of the insolvency of the loan originator, mintos as a representative of the investor, would take over the management of the claim from the loan originator and recall authorisation of the investor to the loan originator or implement another strategy which would be to the best benefit of the investor. This means, the loan originator would no longer be managing the borrowers payments. After having taken over the management of the claim from the loan originator, Mintos would be entitled to transfer the management of the claim to any third party at Mintos’ discretion. This means that Mintos as a representative of the investor would inform the borrower of the assignment and direct continued payments to Mintos or any third party at Mintos discretion. The transition from the loan originator servicing its payments, to Mintos taking over this process, may not happen immediately. The length of time for the transition depends on the legal obligations of the loan originator.
In case of an Indirect Loan Structure.
For loans under the Indirect Structure, the direct claim is against the loan originator and not the borrower and the underlying loans issued to the borrowers are pledged in the name of the respective Mintos company. If the loan originator becomes bankrupt, Mintos have agreements in place with the loan originator and also a commercial pledge which ensures investors on Mintos will be the first to receive payments from bankruptcy assets. In this situation, Mintos will be involved closely in the legal proceedings and all funds received from the loan originator will be divided proportionally to their investments among investors. The time it will take for investors to get the borrower’s repayments returned depends on the legal proceedings and other external factors of the loan originator.
No matter the loan structure, the buyback guarantee is no longer valid if a loan originator goes bankrupt. In all the years Mintos has been in business, only a single loan originator named Eurocent has gone out of business. You can read more about how Mintos is handling this bankruptcy here.
Downsides to the Mintos platform.
Mintos has lowered the interest rates for the loans on the platform several times, so it is now possible to get a bit higher interest rate on some other platforms. Auto Invest can be complicated in the beginning. However MIntos just announced that the interest rate average has gone up about 2 % today, so let’s see if we are returning to the good old days.
Mintos have unparalleled diversification. They are the leading marketplace in Europe and can offer investors numerous opportunities for diversification. They are growing fast and add new functionality, countries and loan originators on a regular basis. It is a well proven platform and is highly trusted in the crowdlending community. If you want to just use a single crowdlending platform rich on functionality and diversification options, Mintos is a great candidate. I am very pleased with the platform and will continue to use it extensively in the future.
Leave a comment.
Have you already invested with Mintos? What do you think of the platform? If you are not signed up yet, what is holding you back? Are you missing some information in the article? Please leave a comment or question below and I will comment back and help you out with any questions or problems you may have.