In this Mintos review I share my personal opinion and why I think it’s a must have and the best crowdfunding platform for beginners. You will also find my results after 6 months of investing and a 1% cash back link at the bottom.
Mintos is a European leading Fintech financial company which offers a global loans marketplace that lets you invest in loans from various loan originators. In other words, is the meeting point between lenders and loan originators. The last use Mintos as a tool to raise capital for their borrowers and investors use it to earn interest, without the need of using an intermediary bank (our loved allies).
Retail and institutional investors can invest in fractions of loans originated across different continents and loan types, offering the opportunity to invest in mortgage loans, personal loans, short-term loans, car loans, invoice financing, agricultural loan, pawnbroking Loan and small business loans.
The platform was launched in 2015 and has grown exponentially since then, becoming the world’s largest marketplace of its kind. Altfi has rewarded Mintos several times during these years.
Mintos has a team of 60 people at its headquarters in Riga, Latvia, in addition to offices in Warsaw and Mexico City. It currently boasts an investor base of 87,000 people from 71 different countries.
How does it work?
In my post, ‘Investing for beginners – how to get started’ I explain the basics of how crowd investing works, being these the main points particularly for Mintos:
- Borrowers apply for a loan at the loan originator.
- The loan originator evaluates the application, sets an interest rate and lends money from its own funds.
- The loans are then listed on the Mintos marketplace, where investors can select loans to invest in, thereafter receiving monthly payments and interest.
What’s the meaning of ‘Mintos’?
My first thoughts when I first heard out about Mintos as a P2P crowd investing company were about its corporative name. I found it inappropriate for the type of business they deal with, until I read their reason for choosing it, as stated in their website:
The word ‘mintos’ comes from mint. In Old English, it is a word meaning:
- a place where coins are made from metal;
- an abundant amount of something, especially of money;
- a place or source of manufacture or invention;
- producing something for the first time.
Thus, our name – Mintos – reflects our mission to facilitate free and efficient movement of capital through technology.
Returns to investors and statistics
- The current average net return for investors is 11.7% (if investing in Euros only)
- The amount of loans funded by January 2019 is 1.6 Billion € against 0.48 Billion € in January 2018, tripling in a year period.
- Mintos has 108,994 registered investors holding an average investment accounts of 4646€ and 1087 loans.
- 29% of investors are active in Mintos secondary market
The business became profitable in 2017, which decreases the most feared investing risk: Bankruptcy. It’s impressive how quickly they reached the green numbers on their balance sheet, taking them a little over than 2 years when most of the start-up companies need an average of 5 years – I would tag that as a high level of success.
You can easily find the latest Annual report on the investor relations page.
Mintos deals with 60 different loan originators, being helpful to add some diversification in our investment account, but it’s also difficult to personally track the quality of all these loans originators. I wanted to clarify my mind a little bit and find out more about at least the loan originator that deals with most of my invested money – Mogo finance
Mogo finance numbers seem to be positive. The last earnings call at the time of writing (2019) reports a healthy balance sheet, income and cash flow statement. The company has been profitable since 2016. I won’t get deep into it, but if you would like to check it out by yourself you can find the last earnings report here.
Mintos is completely free of charge, including service fees and depositing or withdrawing fees.
The secondary market is where investors can resell their investments in order to cash in some invested funds. It is one of the biggest I have seen within my crowdlending platforms, weighing nearly 70M € in loans.
It offers the possibility to sell investments at a premium or discount. Some people will try to sell it at a premium and make a profit, others will sell at a discount if they need to free some cash quickly.
The secondary market is active, helping to improve its liquidity. I have personally been able to sell most of my loans with 8-9% interest rate while the primary market was offering 10-12% with similar conditions.
Some loan originators offer a buy-back guarantee protection if the borrower misses payments for more than 60 days, this adds an extra layer of safety, however, the investor must be conscious that if the loan originator bankrupts you can lose you money too. Ideally, we would have to look up the financial statements and check out the fundamentals of every single loan originator we want to invest with, the same way as share owners do prior buy company shares. This involves a lot of researching time, unless you want to invest serious money, I would follow what I and most of the crowdfunding investors do – diversifying across several loan originators, the more the better. As said before, Mintos deals with 60 loan originators, a good number to get you diversified.
Investors can find all the information from loan originators easily in the platform (financial, loan sizes, skin in the game, website, currency, employees,…) with a Mintos rating included to save you some time researching on what loans originators are safer.
In the details tab, you will find further interesting information on loan originators, as their investment structure, income recognition and amortization type. Ideally, we want to choose loan originators that at least pay interest on delayed payments, however, Mogo finance doesn’t pay this type of interest, but I’m still happy to use Mogo because of its positive financial health.
The auto-invest tool is the feature I like the most. It offers the option to set up different investment strategies, which will reinvest automatically any funds you get from interest or principal payments or simply any further deposits you make to your account.
These are the configurable parameters you can customize to shape your investing strategy within the Mintos auto-invest tool:
- Loan originators – tick those you want to deal with, untick the ones to avoid
- Rating – Mintos rates every loan from A+ to D, being A+ the safest and D the riskiest.
- Loan type – 8 to choose from (business loans. Personal loans, mortgage loans,…). Chose those you understand
- Country – 27 to choose from
- Buyback guarantee – Yes or not
- Interest rates – Higher rates = Higher risk
- Remaining loan term – months
Other settings are: Portfolio size, money to invest in one loan, reinvest, include loans already invested in and diversify across different loan originators.
All these features can seem overwhelming for beginners that are just getting started. Mintos has its own set strategies ready for you, which can give some guidance in the beginning.
My auto invest strategy is very simple. I only invest in loans with Mintos ‘A’ ratings and buyback guarantee. Normally, I can get 10% interest within a 12 monhts period, sometimes more. I spend 5 minutes every week to readjust my auto-invest values according the newer loans issued.
Investors can use 10 different currencies. Mintos provides an online currency exchange for a small fee.
Available currencies : CZK, DKK, EUR, GBP, GEL, KZT, PLN, RUB, SEK, USD.
I personally only use EUR and don’t exchange currencies, but other people do it to improve their returns. For instance, some loans in KZT come with 18.5% interest against 12.5% in EUR. Be aware of the currency valuation risks if you decide to exchange.
The minimum investment is 10 Euros.
It is currently not regulated by the Financial Conduct Authority (FCA) or any other major financial regulatory body, although the team is currently applying for it. However, the Loan Originators are Authority-regulated lenders.
Mintos is already the leader but that doesn’t mean it has to stop here, in fact, it may be just the begining…
The platform is making preparations for providing international bank account numbers (IBANs) and launching a Mintos debit card – projects that are in the centre of their attention for 2019. Their application for the European e-money license should be approved by the end of Q2 2019 and this will enhance the overall experience for Mintos investors.
My returns after 6 months
- Average invested money: 2177€
- Total earning after 6 months: 97€
- ROIC: 4.8%
Comments on the results
I am happy so far with these reseults. I expect and ROIC of 9-10% after a year, which is a great return considering that I’m only investing in low risk loans (A ratings). In the future, I have the option to take in riskier loans or invest in other currencies if I want to improve my returns, for now, this conservative approach is enough for me.
,I update my portfolio with some added comments every month. Don’t forget to check out my last update, where I compare results with others platforms.
My dashboard overview
- Great diversification options.
- Minimum investment amount is only 10€.
- Longer track record compared with other P2P European Platforms.
- Mintos is a profitable company.
- Young and ambitious team with further potential growth ahead.
- All the information is fully transparent in the platform.
- No fees.
- Multiple currencies available.
- Secondary Market is active.
- No regulated by the FCA
- Similar platforms offer higher returns in EUR.
- Need to update the Auto invest strategy periodically if you don’t want to miss out.
For crowdfunding investors, Mintos is definitely a must have platform in your portfolio. I find it to be ideal for new investors, as everything is fully transparent with explatations added, perfect to get you introdued to some vocabulary and functionalities. After all, we all need to begin from somewhere and Mintos could be the right starting point.
Get 1% Cash Back
Get a 1% Bonus on all your investments during the first 90 days if you sign up with my link. I will also earn a bonus but plan to donate it all to the Bill & Melinda Gates foundation. You can read more about it here
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MY PROGRESS TOWARDS ONE MILLION
THE DONATION MILESTONE
Warren Buffet's rule number one: Don't lose your money.
The best crowdinvesting advice in town: ⏬⏬
Don't lose your capital!
Even with a 18% return it won't be enough if you'll lose all of your capital within the next four years.
So, when you invest, think not the short term, think at least 5 years ahead.
Think: "how can I lose my capital in this"
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