Mintos - Overview

Mintos is one of the most popular and successful p2p lending platforms to date.

The loans are proposed by the financial that are affiliated with MinTos. These credits can never be sold entirely, thus ensuring that the proposers always maintain a certain risk in the deal.
Originators are: Crediststar, AgroCredit (Latvia), Lendo.ge, kredito garantas, ACEMA, Banknote, Finance Aforti, Capitalia, Creamfinance, Debifo, HAND UNIJA, Hipocredit and Mogo.
So Mintos stands as manifold between financial offering loans and the public.

Differentiation is also geographical: their loans are from 6 European countries such as Czech Republic, Estonia, Georgia, Latvia, Lithuania and Poland.
The loans offered in August exceeded 60 million, and investors are from all over Europe (except Belarus).

Buy-back guarantee

Buy-back guarantee is a guarantee issued by the loan originator to the investor for a particular loan, whereas the loan originator will repurchase the loan from the investor if that particular loan becomes delayed more than 60 days. The buy-back guarantee is given at an individual loan level and is marked by . Once the loan with buy-back guarantee is delayed more than 60 days, the loan is automatically bought back from the investor at the nominal value of outstanding principal plus accrued interest income.

Risks

As with any investments, there are some risks. The biggest risk is associated with possible credit losses from investments. The following measures have been taken by Mintos and loan originators to mitigate the risk:

1) all loans are issued according to the established policies of the loan originators, which take into account the borrower's ability to repay the loan,

2) for certain types of loans (e.g. mortgage loans or vehicle loans) collateral has been obtained from the client, which would be used to recover the loan in the case of default and therefore lower credit losses if any,

3) for certain loans (e.g. business loans) other credit enhancements are obtained, such as a personal guarantee

4) for certain loans the loan originator has provided a buy-back guarantee, which means that if the loan is delayed for 60 days, the loan originator repurchases the investment for the nominal value of the principal and the accrued interest till the date of repurchase.

The following measures can be taken by Investors to mitigate the risk - make fractional investments in several loans across different borrowers and loan types or loan originators, which diversifies the possible credit risk.

True risks

We have seen the risks associated with credit, but with good guarantees and automatic repurchase this risk can be significantly curbed.
Instead remain out two risks, which are perhaps the ones that really should scare:
1- The risk of failure of Mintos
2- The risk of failure of the financial

1- In the unlikely event of Mintos folding investors will be given full information from the portal database on the transactions they have concluded within the framework of the portal. Mintos liquidator or administrator will take all necessary actions to transfer the servicing of all loans and investments to an appropriate manager. In order to ensure the implementation of the aforementioned provision Mintos and the law firm FORT have entered into a contract of bailment under which each month Mintos hands over, and the law firm FORT accepts for storage, data medium containing all current data from the portal.

2- In the unlikely event that a loan originator goes out of business, we have put in place arrangements so that you would continue to receive payments on the loans you have invested in through our platform. When you invest in a loan, you are buying claim rights against the borrower based on assignment agreement. Borrowers make payments on their loans to the respective loan originator, and in turn, the loan originator and Mintos distributes payments to investors. The assignment agreements would remain in place and be unaffected in the unlikely event that a loan originator were to fail or become insolvent.

As per the assignment agreement and cooperation agreement with Mintos, in case of the insolvency of the loan originator, Mintos as a proxy of the assignee would take over the management of the claim from the loan originator and recall authorisation of the assignee to the loan originator. After Mintos had 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. It means that Mintos as a proxy of the assignee would inform the borrower on the assignment and demand to continue to make payments to Mintos or any third party at Mintos discretion.

Secondary market

The secondary market is very easy to use and fluid: you are able to sell many loans at the same price or with a premium margin.

Conclusioni

Mintos is one of the safest and most reliable platforms encountered until now, able to differentiate much risk without representing a major commitment to the investor. As long as the banking system holds the risks in using this platform will remain contained.

Last edit: 9/9/2016