How would you describe Mintos platform?

Mintos is so much more than a regular peer-to-peer lending platform — Mintos is a global online marketplace for loans. We provide retail investors an easy and transparent way to invest in loans originated by a variety of alternative lending companies around the world. Since launching in 2015, Mintos has demonstrated exponential growth and has become the world’s largest marketplace of its kind. Currently, there are 26 loan originators placing their loans on the Mintos marketplace.

– What are the three main advantages for investors?

First, Mintos provides unparalleled diversification possibilities across different borrowers, loan types, loan originators, and geographies — all within a single marketplace.

Second, at Mintos, we take investor protection seriously. The interests of investors are safeguarded by various layers of risk mitigation like buyback guarantees, loan originator due diligence and continuous performance monitoring.

Third, investing through the Mintos marketplace is incredibly easy. Investing in hundreds — or even thousands — of loans and building a well-diversified portfolio is just a matter of entering preferred parameters into our Auto Invest tool.

– What ROI can investors expect?

Great returns are another major reason to invest through the Mintos marketplace. As of July 2017, the average net annual return for investors is 11.91%. On an individual loan level, the rate varies from 7% to 17%, depending on the type, origin, and currency of the loan.

– How do you select the best loan originators?

Our risk team carefully assesses each loan originator prior to joining the marketplace. We execute due diligence for each prospective partner. We perform thorough analyses of financial statements, management quality, underwriting policies, credit scoring, loan portfolio performance, and data accuracy to ensure that loan originators comply with the strict risk standards we have set for the Mintos marketplace.

– Do you take all loans from loan originators or you pre-select them for your investors?

We select the loan originators, but not the individual loans they place. After launching our partnership, we continue monitoring loan originators for risks on an ongoing basis. A major part of this process is monitoring the quality and performance of the loan portfolios loan originators place on the Mintos marketplace to prevent adverse selection. On top of that, all loan originators that place loans on the Mintos marketplace are required to keep a certain percentage of each loan on their balance sheet. This is referred to as ‘skin in the game’, and reflects how much of their own funds loan originators retains in each loan. This practice ensures that the interests of loan originators are closely aligned with the interests of investors — both sides have a stake in the loan.

– Is the technical platform self-developed or does it use a white-label solution?

Mintos is 100% built in-house. We’ve created it from scratch, and this has allowed us to make it incredibly user-friendly. Customers reviewing Mintos on Trustpilot praise the intuitive user experience design. The success of our platform has very much to do with our customer-centric approach and growth mindset, which result in continuous improvements. We’ve pioneered prominent features such as the buyback guarantee, the availability of investments in multiple currencies, and currency exchange directly on the marketplace. And there are many more to come.

– How reliable is the credit rating and credit history data provided for the loans listed on the marketplace?

A majority of the loan originators on Mintos marketplace have been in business for many years, which has allowed them to develop reliable credit scoring models. For example, Creamfinance uses a smart data approach, utilizing advanced algorithms and machine-learning capabilities. Of course, each loan originator has their own approach to loan underwriting — some companies are more data driven than others. We, in turn, do our best to ensure that the data provided by the loan originators on the marketplace is structured and easily available to investors.

– How is Mintos financed?

At the beginning of 2016, we completed a seed-funding round, attracting EUR 2 million from Skillion Ventures, a Riga-based venture capital firm.

– Are you open to international investors?

Of course. We’re operating from Latvia, an EU member country, so we accept investors from all eligible countries by EU regulation. We currently have active investors from more than 60 countries across the world.

– Is your platform regulated?

All loan originators are licensed and operate under the regulations of their respective markets. Mintos operates in compliance with Latvian regulations. The facilitation of buying and selling of claim rights is not specifically regulated at the moment, but this is about to change. The Latvian Ministry of Finance is currently working on a new regulatory framework, and we are glad to be involved very closely in the process. We definitely see value in risk-based and smart regulation, and think it will be beneficial for both the industry and investors.

– What are your thoughts about the provision funds and buyback guarantees – mandatory or not? Will these be gone in few years?

Both of these are tools to manage risk for investors. They are especially important for retail investors, who are often cautious about default risk. Buyback guarantees and provision funds serve the same purpose — to repay delinquent loans. However, it is important to understand that these measures come at an additional cost. For example, loans with a buyback guarantee come with a lower interest rate than loans without a buyback guarantee. The difference is the approximate estimated annualized bad debt rate. By offering a buyback guarantee, the loan originator keeps the borrower’s default risk on its side. To compensate for this risk, the loan originator takes a higher share of the interest paid by the borrower. On the Mintos marketplace, both loans with and without the buyback guarantee are offered. Investors can choose the type of loan they prefer.

– How do you see competition in Europe and in the other markets you have started to operate in?

As a marketplace for loans, we see very few direct competitors, if any. Of course, due to the rise of peer-to-peer lending, we see many indirect competitors — regular peer-to-peer lending platforms — appearing almost on a daily basis. Our investor bases certainly overlap. However, we see more value in growing the pie than in dividing the current pie — there is still huge untapped market opportunity.

– What are the trends for significant features of your platform, such as Auto Invest and the Secondary Market?

Auto Invest is the single most popular feature of the Mintos marketplace — more than 75% of our investors actively use it. This is the reason we devote a lot of attention to improving this tool. Just recently we added several new features to AI, including the option to set the priority order in which multiple Auto Invest portfolios are executed. Our investors take full advantage of this feature; one of them has even set up 53 Auto Invest portfolios with different parameters for each.

The Secondary Market is also an important feature of the Mintos marketplace; it ensures investment liquidity. About 30% of our investors have used it at least once to sell loans they owned, generating about 300 000 transactions in total. With the marketplace growing, we also see an increase in the number of transactions in the Secondary Market.

– Any plans for expanding to new markets with loan originators?

We are constantly looking for new markets to enter; growth is the main goal of our current agenda. We are about to enter new continents — exciting news for our investors.

– Where do you see your platform in five years?

While our business model means we are not directly comparable to other peer-to-peer lending platforms, according to the most recent AltFi data, Mintos is already the leading player in Continental Europe. In five years, we see ourselves becoming a truly established and global marketplace for loans that facilitates the free movement of capital.


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