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This Friday on the P2P conference I attended in Riga, Martins Sulte, CEO and co-founder of Mintos announced a new product on the Mintos Marketplace. It is a product that is somewhat similar to Bondoras Grow & Go product. However where Bondora only offers an interest rate capped at 6.75 % on their product, Mintos offers an interest rate of the current platform average return of all loans on the platform. This is 11.98 % at the time of writing this post. However this will change over time. Invest & Access will be prioritised over Auto Invest. The minimum investment to setup an Invest & Access portfolio is 500 euros. There are no fees to create the portfolio and there is an almost instant access to the invested funds when loans will be sold automatically on the Mintos secondary market to other Invest & Access investors. When I say almost, it means that it of course will take a little time to liquidate the funds using the Mintos secondary market. However an interesting recent experiment made by p2p-millionaire showed that it was possible to sell 791000 euro worth of loans within 24 hours on the Mintos secondary market. That kind of liquidity should be sufficient for most investors. Invest & Access will become available on the Mintos Marketplace by Monday the 10th of June 2019. You can see Martins Sultes presentation of the new product in this Youtube video from the P2P conference main stage. For your convenience, I have gathered a few screenshots of the presentation below.
The impact of Mintos Invest & Access for investors
The impact of the product will most likely mean an increase in investors portfolio size on the Mintos Marketplace as investors in similar products on other platforms like Bondoras Grow & Go may choose to exit and transfer their funds to Mintos instead. It makes a lot of sense. A negative impact could then be that the Mintos loan originators choose to lower the recently raised interest rates on their loans again as demand increases. Only time can tell.
To me it looks like just like an addition to the three already existing Mintos Investment Strategies, closest in structure to the “Diversified strategy”. The main differences is that it takes priority over any Auto Invest strategy and that it currently offers a higher interest rate.
“When you want to cash out money, Invest & Access automatically sells loans in your portfolio to other investors using Invest & Access. Selling usually happens within a few minutes, depending on demand from other investors at that time. You can only sell current loans. If a loan in your portfolio is late, you can get your money when it recovers or buyback kicks in. You can also manually sell late loans on the secondary market from the My Investments page”.
This means that you will need to do some manual work in any case on the secondary market to sell the non-current loans in your portfolio if you wish to liquify the full portfolio. On top of that, if we imagine a situation where a lot of investors wants to sell their investments and few investors wants to buy, investors may not be able to liquidate their funds as promised.
When I attended the Meet and Greet event at the Mintos office in Riga, prior to the P2P conference, Martins informed me that the Mintos Marketplace currently has an oversupply of loans and an undersupply of investors. The remaining available loans for investing that are not grabbed right away by Auto Invest, will naturally have a larger amount of loans that are unattractive to some investors using custom Auto Invest. As Invest & Access gets priority over Auto Invest, this means that more of the best loans will go to Invest & Access before they reach Auto Invest and this could affect investors with custom Auto Invest in a negative way, depending on their strategy.
If Invest & Access is good or bad all depends on what kind of investor you are. If you want the least amount of hassle and are already using one of the existing Mintos Investment Strategies or a similar product on another platform like Bondoras Go & Grow, you should look into this product. Let us not forget that Mintos has two kinds of customers. Investors and loan originators. This new product seems to be a way of forcing some custom portfolio investors to invest into a diversification including riskier loans and loan providers, if they want the attractive loans as well.
Share the knowledge of Invest & Access
Feel free to share your opinion of the new product from Mintos Marketplace by commenting below. If you are an investor, is the product good or bad for you? Do you think Mintos is being fair toward custom Auto Invest strategy investors? If you have any friends in your network that may find this new product intriguing or unfair, please share the knowledge using the social media buttons below this post.