It is always important to understand basic principles of how P2P marketplace selects assets for listing as its quality is the key factor for consistent profitability for every investor.

Check these procedures at Mintos:

Agricultural Loans

Currently represented only by AgroCredit, Latvia: 

  • Loans originated:                                                   EUR 0.38 mio,
  • Default rate:                                                            0%,
  • 60+ days late:                                                          0%,
  • Average Annual Yield:                                         7.1%

 

Business Loans

Represented by:

  • Aforti (Poland):                                                        EUR 3.5 mio,
  • Capitalia (Estonia, Latvia, Lithuania):                   EUR 6.5 mio,
  • Mano Unija (Lithuania):                                         EUR 0.1 mio,

Loans stats:

  • Loans originated:                                                   EUR 10.1 mio,
  • Default rate:                                                            EUR 0.05 mio; (1.2%)
    •  Capitalia loans in Lithuania without Buyback guarantee went into default.
  • 60+ days late:                                                          EUR 0.14 mio; (3.1%),
    • Capitalia loans in Lithuania, Estonia and Latvia fell into this category.
  • Average Annual Yield:                                           12.1%

 

Invoice Financing

Represented by:

  • Debifo (Lithuania):                                                  EUR 6.0 mio,
  • Capitalia (Estonia, Latvia, Lithuania):                   EUR 4.2 mio,
  • PangMaoBao (China):                                             EUR 5.4 mio,

Loans stats:

  • Loans originated:                                                   EUR 15.6 mio,
  • Default rate:                                                            EUR 0.02 mio; (0.1%)
    •  Capitalia loans in Lithuania, Estonia and Latvia without Buyback guarantee went into default.
  • 60+ days late:                                                          EUR 0.06 mio; (0.4%),
    • Capitalia loans in Lithuania, Estonia and Latvia as well as Debifo (Lithuania) fell into this category.
  • Average Annual Yield:                                            9.5%

 

Mortgage Loans

Represented by:

  • ACEMA (Czechia):                                                   EUR 0.2 mio,
  • Extra Finance (Romania):                                      EUR 0.8 mio,
  • Hipokredit (Latvia, Lithuania):                              EUR 8.2 mio,
  • Kredito Garantas Extra Finance (Lithunia):        EUR 0.9 mio,
  • West Kredit (Latvia):                                               EUR 0.1 mio,

Loans stats:

  • Loans originated:                                                   EUR 10.2 mio,
  • Default rate:                                                            EUR 0.18 mio; (3.2%)
    •  Hipokredit loans in Latvia without Buyback guarantee went into default.
  • 60+ days late:                                                          EUR 0.17 mio; (2.9%),
    •  Hipokredit (Latvia) and Kredito Garantas (Lithuania) fell into this category.
  • Average Annual Yield:                                            12.7%

 

Personal Loans

Represented by:

  • Aasa (Poland):                                                         EUR 1.9 mio,
  • Banknote (Latvia):                                                  EUR 34.8 mio,
  • Capital Service (Poland):                                       EUR 4.6 mio,
  • Creamfinance (Czechia, Demark, Georgia):       EUR 3.9 mio,
  • Creditstar (Poland, Spain):                                    EUR 4.5 mio,
  • Eurocent (Poland):                                                 EUR 0.7 mio,
  • ID Finance (International):                                    EUR 0.1 mio,
  • ITF Group (Bulgaria):                                              EUR 0.7 mio,
  • LuteCredit (Moldova):                                           EUR 0.4 mio,
  • Lendo (Georgia):                                                    EUR 13.6 mio,
  • Mozipo Group (Poland):                                       EUR 3.4 mio.

Loans stats:

  • Loans originated:                                                   EUR 67.8 mio,
  • Default rate:                                                            EUR 0.0 mio; (0.0%)
  • 60+ days late:                                                          EUR 0.0 mio; (0.0%)
  • Average Annual Yield:                                         11.9%

 

Pawnbroking Loans

Currently represented only by Banknote (Latvia): 

  • Loans originated:                                                   EUR 2.7 mio,
  • Default rate:                                                            0%,
  • 60+ days late:                                                          0%,
  • Average Annual Yield:                                         9.1%

 

Car Loans

Represented by:

  • ACEMA (Czechia):                                                   EUR 0.02 mio,
  • MOGO (Estonia, Latvia, Lithuania, Poland):       EUR 57.9 mio,
  • Nord Lizings (Latvia):                                             EUR 0.06 mio,

Loans stats:

  • Loans originated:                                                   EUR 58.0 mio,
  • Default rate:                                                            EUR 0.15 mio; (0.5%)
    •  MOGO loans in Latvia, Estonia and Lithuania without Buyback guarantee went into default.
  • 60+ days late:                                                          EUR 0.03 mio; (0.1%),
    •  MOGO loans in Latvia, Estonia and Lithuania without Buyback guarantee went into default.
  • Average Annual Yield:                                            12.2%

 

Short-term Loans

Represented by:

  • Aasa (Poland):                                                         EUR 0.0 mio,
  • Aventus (Czechia):                                                  EUR 0.2 mio,
  • Banknote (Latvia):                                                  EUR 4.8 mio,
  • Creamfinance (Czechia, Demark, Georgia):       EUR 42.1 mio,
  • Creditstar (Poland, Spain):                                    EUR 3.2 mio,
  • GetBucks (Poland):                                                 EUR 0.2 mio,
  • ID Finance (International):                                    EUR 2.2 mio,
  • ITF Group (Bulgaria):                                              EUR 1.0 mio,
  • Lendo (Georgia):                                                     EUR 71.1 mio.

Loans stats:

  • Loans originated:                                                   EUR 124.7 mio,
  • Default rate:                                                            EUR 0.0 mio; (0.0%)
  • 60+ days late:                                                          EUR 0.0 mio; (0.0%)
  • Average Annual Yield (AAY):                             11.9%

 

Total Loans (all segments)

Loans stats:

  • Loans originated:                                                   EUR 289.5 mio,
  • Default rate:                                                            EUR 0.4 mio; (0.5%)
  • 60+ days late:                                                          EUR 0.4 mio; (0.5%)
  • Average Annual Yield (AAY):                             11.8%

 

Conclusion

Taking into account key fixed income metrics such as Default rates and Average Annual Yield (AAY) it is possible to see that the most lucrative loan segment at the Mintos marketplace is Short-term loans offering a hefty AAY of 11.9% and Personal loans  (AAY of 11.9%) without any reported defaults at all since 2015 based on EUR 124.7 mio of the originated loans. At the same time as a Mintos representative has commented (discussion with P2P team) that these 2 types of loans are all covered by BB (BuyBack) option so any investor acquiring these loans is actually betting on the fact that loan originators of these loans will stay solvent. Simply saying it is a synthetic type of a corporate bond of a respective loan originator. Usually, these types of bonds are available only for accredited investors and has a minimum investment barrier of USD 100K while at the at the Mintos marketplace P2P investors have a chance to acquire these synthetic bond products.

Meanwhile the least appealing sectors are Invoice financing and Business loans with the same 3.1% 60+ days late rate (which is quiate a warning sign of assets quality deterioration), while Invoice financing has reported one of the lowest AAY's among asset sectors - just 9.5%. 

Mortgage sector has reported the highest AAY of 12.7%, however the default rate of 3.2% and 60+ days late rate of 2.9% are slightly poisoning investors cake. 

Car Loans assets also showed surprisingly strong figures of AAY at 12.2% and default rates of less than 0.6%. This could be a sign of a high business model efficiency of loan originators in the sector.

All in all the assets available at the Mintos marketplace offer lucrative alternative to virtually 0% deposits at European banks despite repesenting slightly higher risk.  It is actually an opportunity for  P2P investors to construct own synthetic bonds portfolio including key local leading loan originators in their segements.

Check Mintos website here.

 

Let's discuss it!

 

 

 

 

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