European P2P Lending Platform Mintos Releases Updated Risk Scores

European peer-to-peer lending platform Mintos has released its latest Risk Score updates.

As noted by the Mintos team, this most recent update is based on key developments and data analyzed during Q1 2021.

Mintos writes in a blog post that if you are new to the platform or you want a more comprehensive overview of historic changes of the Mintos Risk Score, then you may access their spreadsheets – which contains the breakdown of quarterly information (via the Updates page).

Here’s an overview of key changes in the Mintos Risk Scores as well as sub-scores based on Q1 2021:

“The world is becoming better at living in the pandemic, vaccination is progressing globally, and restrictions on movement and activity are becoming more relaxed. Loan default rates have now reverted to pre-COVID-19 levels, and the ratio of non-performing loans continues to decline, signaling lower risk for investors.”

Because of these seemingly positive developments, it now appears that the profitability of some of the “evaluated” lending firms is improving gradually, the Mintos team noted while adding that this has contributed to a net “positive impact across risk subscores.” It has also led to changes in the Loan Portfolio Performance and Buyback Strength subscores, the report revealed.

Mintos further noted that they are please to report that the update based on their evaluation of information from Q1 2021 “brings more positive changes to the Mintos Risk Scores than negative ones.”

Mintos added:

“Overall, the Mintos Risk Score was upgraded for loans issued by 8 out of 93 entities included in this update. We’re also introducing updates for 2 entities that were added to the marketplace since the previous update (IDF Eurasia’s short-term loans entity Moneyman and the Mexican lending company Swell).”

The company confirmed that the Mintos Risk Score was “downgraded only in one case.”

Mintos’ report continued:

“With this update, we’re also withdrawing scores for loans from 3 entities. Two of those belong to Creamfinance group: loans from the Czech Republic entity and loans from the entity operating in the Danish market. In the first case, the Mintos Risk Score is withdrawn as currently there are no active loans on the marketplace from Creamfinance Czech Republic, and there is no outstanding investment in loans from this entity at the moment. In the second case, the score is withdrawn due to Creamfinance’s business decision to wind down their Danish operations and exit the market.”

The report also noted that the third withdrawn score is “related to loans from the Ukrainian lending company E-Cash.” In April 2021, the firm had begun to wind-down “while having pending amounts due to investors on Mintos,” the P2P lender noted while adding that the lending firm had been  suspended on the Mintos Primary as well as the Secondary Market.

Mintos also mentioned that when it comes to subscores, the “most changes were made for the Buyback Strength subscore.” The P2P lending platform added that overall, it was “upgraded for loans from 13 entities and downgraded for loans from 2.”

Eleving Group accounts for “most of the changes due to improved profitability and equity position on the group level (11 out of 13 upgrades of this subscore),” Mintos added while noting that “also, from this update on, companies previously operating under the Mogo group are attributed to the Eleving Group, across the Mintos Risk Score’s related content. ”

The report further noted:

“The next subscore with the most changes is Loan Portfolio Performance, improved mostly by lower volatility of issuance volumes. It was upgraded for loans in 10 instances and downgraded in one.”

The report also noted that in this recent update, the Cooperation Structure subscore “remained unchanged for all evaluated loans.”

The company further noted that the regular schedule for the Mintos Risk Score updates is quarterly and that exceptions “will be made in some cases when there is a significant material improvement or deterioration for specific loans on the marketplace, in which case the changes are introduced as necessary.”

You may review Mintos’ Risk Score methodology here.

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