European Investment Platform Mintos Reports Significant Increase in Activity During Sep 2022

In the latest Insight update from Mintos, Martins Sulte, the platform’s CEO and Co-Founder of Mintos, comments on the last quarter on Mintos and provides a “sneak peek” at what you can expect in the following months.

As mentioned in a blog post by Mintos, the last quarter was “one of transformation, marking the end of a long journey to becoming regulated.”

Martins Sulte said:

“The transition to Notes resulted in a lot of change for the platform and investors. Change isn’t always easy, and it took time for Mintos and investors to adapt to the regulated investment setup. So we’re happy that the transition is complete and that investors now benefit from additional transparency and protection under the MiFID framework (the cornerstone of the EU’s financial markets regulation).” 

The road towards regulation, which was already bumpy on its own, was “made unexpectedly more challenging due to the flow-on effects of the war in Ukraine.”

Sulte says:

“Although Russian lending companies aren’t going out of business, the restrictions imposed by the Russian Central Bank are still in place. Because of these restrictions, Russian lending companies are limited in how much they can transfer to investors on Mintos each month. We’ve been working tirelessly to recover these funds for investors, and recently, there have been positive developments with Revo receiving permission to transfer larger payments.”

Outside of Mintos, financial markets “have been turbulent as supply chain issues, and energy prices (among other things) caused inflation to skyrocket and interest rates to rise.” As a result, several major asset classes “came under pressure.”

Meanwhile, Mintos’ average interest rate has “consistently grown.”

Sulte adds:

“The average interest rate is now among the highest in Mintos’ history. Plus, investors have been able to participate in cashback campaigns to boost their earnings even more,”

Going forward, Sulte says that “funds in recovery remain the biggest focus for us.”

They’ll continue “working with Russian lending companies to recover investors’ funds, and as usual, we’ll provide updates as soon as more developments occur.”

Sulte continued:

“Of course, we’ll also work on the cases outside Russia. In the next few months, we’ll finally be able to share news regarding the outcome of the Wowwo case. And pending payments for IDF Eurasia, ID Finance, and Creditstar have been restructured, so there are now agreements in place which they must (and have been) adhering to for the remainder of the year. As mentioned in our latest funds in recovery update, we’ve made significant progress in recovering funds this year, and we’re confident that this will continue.”

Mintos is also “making progress regarding the withholding tax requirements for private individuals.”

When Notes first launched on Mintos, “the withholding tax rate (required by law) was 20% (reduced to 10% with a tax resident certificate).”

But Mintos had already begun work “to reduce the withholding tax requirement to 5%.”

Martins Valters, COO and Co-Founder of Mintos, explains:

“Together with the finance trade association, we’re making good progress on getting the law change approved. We expect to receive the next round of approvals by the end of the month. Then it may take a month or so for the president to give their final approval. All going well, the 5% withholding tax rate could come into effect around 1 January.”

He adds:

“The 5% withheld tax will still count as tax paid, and in most countries, investors can use it to offset their local tax payment at the end of the year. Plus, there will be no need to submit additional information (e.g., a tax resident certificate). These are market-leading developments, and we’re looking forward to implementing the reduced rate for (private individual) investors in the near future.”

Over the following months, Sulte adds that “investors can expect even better diversification opportunities as we introduce new lending companies on Mintos. Plus, we’ll launch our licensed services in new markets across the EU so more investors can invest in loans in a regulated environment.”

A new product offering for investors on Mintos, ETFs, is also “in the works.”

Marcis Gogis, Head of Product at Mintos, explains:

“We’ve finalized the research and analysis phase, including a concept for the technical solution and a design prototype (that’s been tested with several Mintos investors and beta tester groups), so the offer itself is defined. Initially, this project was put on hold when the war began in Ukraine, but we’ve now restarted it, and the development phase can begin. We’re looking forward to sharing more with investors as we move further through the process.”

As noted in the update,  there was “a notable increase in investment activity on Mintos during September.”

Peteris Mikelsons, Head of Partnerships at Mintos, explains “around €13 million were being invested each week in September compared to an average of €11.5 million in August. Plus, the average interest rate continued to grow.”



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