European P2P lender Mintos shares updated risk scores based on Q2 2021 data and developments
European P2P lender Mintos has published Risk score updates for the month of October 2021.
As mentioned in a Mintos blog post, dated October 4, 2021, the latest Mintos Risk Score Updates “Based on developments and data for the second quarter of 2021 are now online. “
The Mintos team also shared a summary of their recent changes, and full details on this quarterly update can be accessed through the Mintos Risk Score Updates page. A detailed overview of historical changes in the Mintos risk score over the quarters is also available.
As stated in the update:
“Due to the high number of new loan companies that we brought in this summer, in this update most of the changes are due to these companies making their way to the Mintos Risk Score Tracker. In addition, for a number of companies, the Mintos risk score for loans has been removed.
The Mintos team added that “in general we haven’t noticed any major trends behind the most recent changes in Mintos risk score and sub-scores.” Some changes are “driven by marginal changes in the company’s financial position in the second quarter of 2021, and others are driven by country-specific factors, for example currency volatility.”
The company also noted that most of the changes were observed “across the Redemption force sub-score and the Loan portfolio performance sub-score. ” The Lending service efficiency has “changed in three cases, and the co-operation structure sub-score remained unchanged for all loans assessed”.
The Mintos risk score has “changed for 7 companies: 6 were downgraded, while one company was upgraded. “
As mentioned in the announcement, 10 new lenders “whose loans are assessed with Mintos risk score have been added to the list”. Most of them grant loans in Mexico: Alivio Credit, CAPEM, Conmigo Vales, GoCredit. In addition, the Mexican entity of ID Finance “recently relaunched activity on Mintos”.
Jet Finance and LF TECH are new companies on Mintos offering investment opportunities from Kazakhstan, Fenchurch Legal is “an addition to Mintos UK investment offering, Watu Credit has joined Mintos with motorcycle loans from Uganda and Zaim Online offers loan investment from Russia.”
The update further stated that the Mintos risk score had been “withdrawn for 8 companies and / or entities” and for some of them this was “due to a current inactive status on Mintos”.
Companies offering inactive investments on the platform would be AgroCredit Latvia, Creamfinance Latvia, Kredit Pintar Indonesia, Mikro Kredit Belarus, Pinjam Yuk Indonesia and Sun Finance Denmark.
Loan scores Dozarplati Russia and Raising Albania have now been withdrawn and “will not be assessed in future updates as these loans have been bought back from Mintos investors due to changes in the business directions of the loan companies.”
As noted in the announcement, the regular schedule for Mintos Risk Score updates “is quarterly.” Exceptions will be made “in certain cases when there is a significant improvement or deterioration of certain loans in the market, in which case modifications are introduced if necessary”.
As explained in the P2P Lender’s blog post, the Mintos Risk Score is “an aggregate of four sub-scores that are assigned to four different aspects of retail loans as investment opportunities.”
These sub-scores assess:
- the performance of the loan portfolio (the health of the portfolio and the historical performance of the loan portfolio),
- effectiveness of the loan manager (the capacity of the loan manager to collect payments from borrowers),
- repurchase soundness (the ability of the repurchase debtor to meet its contractual obligations, meet liquidity needs and capital adequacy), and
- cooperation structure (the legal framework between the credit issuing company and Mintos).
Depending on the importance the Mintos team saw in each sub-score, the sub-score weights “are loan portfolio performance 40%, loan service efficiency 25%, buyout strength 25%. and the legal structure 10% “.
The Mintos risk score and sub-scores are “expressed on a numerical scale of 10 to 1, where 10 is low risk and 1 is high risk.” The score can also be ‘displayed as’ Score withdrawn’, with a value of 0, when one or more sub-scores are not available, or simply when there are no loans available for investment by. a specific loan issuing company.