The largest and most popular P2P lending site in Europe favoured by the crowds
Although not as old as some, Mintos has quickly become an undisputed market leader for peer-to-peer consumer lending in continental Europe. Its loan originator base is by far the largest, and it has also attracted a huge amount of investors from all over the world. Is Mintos simply the best? Or has it run out of steam lately?
|Total Investment Volume||€6.5bn+|
|Average annual interest||11.34%|
|Investment Fees||0.85% to sell loans|
|Who’s eligible to invest||EEA bank account holders|
|Investment Type||Marketplace Lending|
|Auto Invest Function||Yes|
|Investor Protection||Buyback Guarantee|
|Currencies||EUR + 7 others|
|Website Language||En, Lv, Cs, De, Es, Pl, Ru, Nl|
PROS & CONS
- Mintos is the largest and most popular P2P lending site out there, accounting for almost half of the euro-denominated P2P lending market. The numbers are just impressive: over 2 million loans with a total value of €6.5 billion funded by almost 400,000 investors. Mintos has also won the AltFi’s People’s Choice Award for five consecutive years (2016-2020). It’s the clear leader of European P2P lending with a truly global reach.
- At the time of writing, you can invest in personal, short-term, car, business and other loans coming from 62 lending companies from 33 countries, which provides an exceptional diversification opportunity, all on a single platform. High diversity of loans and loan originators have historically come along with high and stable returns – roughly 12% annually between 2015 and 2018. Even after a bumpy 2020 (more on this below), the average historical return has come down to just above 11%, which is still more than decent.
- In 2020, the platform introduced a new investment product – the Mintos Strategies. You can simply choose a ready-made portfolio that fits your risk profile – “conservative”, “diversified” or “high-yield” – earn interest, and enjoy instant withdrawals (at least in “normal market conditions”). It’s an ultimate hands-off, high-liquidity option.
- On Mintos, it’s the quantity, rather than quality, of loans that help you minimize your risks. In a well-diversified portfolio, you will likely have minimum exposure to each single loan originator, which will shield you from any substantial losses should the loan originator go bust. And they might – Mintos hasn’t proven very diligent when it comes to tracking the financial performance of the companies it lists on the platform, and there have been a few (sometimes quite spectacular) defaults. At the moment, Mintos lists 15 of its loan originators as suspended or defaulted. Many other companies are unprofitable and/or don’t provide audited financial reports, so more defaults are likely in the future.
- Poor loan originators’ condition inevitably leads to inferior results for investors. Mintos currently has over €81 million-worth of defaulted loans, with an average time in recovery above 200 days in the case of almost all loan originators, and often surpassing 300 and 400 days. It’s reasonable to suspect that most of this capital will never be recovered.
- A large share of this “bad debt” has piled up recently. Last year was, safe to say, tragic for Mintos. The average annual return has barely stayed positive at 0.95%, and write-offs increased almost six times compared to 2019. The much poorer performance went along with lower investors’ interest – in our COVID-19 impact analysis, Mintos joined the ranks of 10 platforms that had declined the most in terms of total investment volumes in 2020 vs 2019.
Who is behind Mintos?
Mintos was founded by Martins Sulte, Martins Valters and four founding angel investors – Maris Keiss, Aigars Kesenfelds, Kristaps Ozols, and Alberts Pole – all associated with 4finance and Mogo, two large digital finance companies offering personal (4finance) and car loans (Mogo). Besides, Mintos has probably the largest team among marketplace lending sites, with close to 200 employees.
The six founders remain the main shareholders of the company, along with employees through stock options and smaller crowdfunding investors. In the last crowdfunding round in November 2020, Mintos managed to raise over €6.5 million, including the first million funded in just 15 minutes. This seems to show that, despite the recent inferior performance, Mintos enjoys a substantial level of trust and confidence from investors.
What does Mintos offer?
The majority of investment opportunities are personal loans (over half of all available deals), short-term or payday loans (roughly a quarter of all loans) and car loans (about 18%). The remaining 5% or so of deals include agricultural, business, invoice financing, mortgage, and pawnbroking loans.
How much can you earn?
Interest rates vary from roughly 5% to even 20%. Your returns will largely depend on your strategy and luck – should a loan originator you’re exposed to go bust, your earnings will suffer. Nonetheless, average historical returns used to be around 12% and have come down to roughly 11% lately. Mintos Strategies, which has a much shorter track record than the platform overall, has so far returned between 8.8% (conservative) and 9.8% (high-yield).
Who is Mintos best for?
Mintos can be used in several ways, depending on your investment preferences. Mintos Strategies offer a totally hands-off approach with relatively high returns and can also be a great option for investors who only start their adventure with P2P lending investments. If you’d rather supplement your broader portfolio with high-risk, high-yield personal loans, you can set up your custom auto-invest strategy. Aiming at lower-risk options would probably be the least recommended – there are better platforms out there for safe investments.
How to invest on Mintos
Create an account, verify your identity, deposit funds, and you’re ready to start investing. The best way to go ahead with it is to choose one of the ready-made strategies or create your own. Manual investing is also possible, but it seems just a waste of time in this case.
It seems to me that Mintos is increasingly becoming a love or hate story. It certainly has a large crowd of trusting investors – they keep choosing it for the People’s Choice Award after all. But there are more and more voices that point out Mintos’ poor monitoring of loan originators, a growing pile of “bad debt”, and very poor performance during the bumpy 2020. They see investments on Mintos as unreasonably risky or even straightforward “junk”. One way or another, it seems unlikely that Mintos will lose its strong leading position on the European P2P lending scene, let alone go bust. The company keeps increasing the number of users, recently surpassing 400,000, and enjoys a big credit of trust from most investors. Mintos has also hinted that the troublesome times are behind it and that default rates have already reverted to pre-COVID levels. Time will tell whether the largest European P2P lending platform has fallen into serious long-term issues or just felt the impact of the COVID slow-down a bit more than others – with a possible quick rebound.
P2P Market Data are dedicated to providing unbiased reviews of P2P Lending platforms and other alternative investment platforms. We are on a monthly basis collecting funding amounts from over 90 different platforms for The Monthly Funding Report.
When reviewing an alternative investment platform, we consider a variety of factors such as:
- Number of investors
- Minimum investment requirement
- Historical annual returns
- Diversification opportunities
- Reinvestment opportunities
- Educational and informational offerings
- Platform fees
- Total capital invested
- Features (such as secondary market and automatic investing)
- General transparency (the difficulty of finding who the owners are, how they make money on the platform(fees), terms & conditions and more)
- Management team
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