To cover topics of interest when it comes to funds in recovery, we asked investors to submit their questions via Slido. Now that we’ve collected these, we’ve put together information for this special article: “Mintos Investor Q&A: Funds in recovery – 2022 Q2 update in August”.
We took the questions with the most upvotes and grouped them into 3 themes that emerged as the most popular:
I – Questions about the status of Russian lending company funds
II – General questions about funds in recovery (and more) on Mintos
III – Lending company-specific questions about funds in recovery
Funds in recovery overview
Firstly, no new defaulted cases occurred during Q2 2022; however, work is still ongoing for several of the defaulted cases that occurred before Q2.
The current cases in default can be divided into three groups:
- Those cases are in the process of being “worked out”. These have active agreements or schedules in place where funds are being transferred. This includes Monego, Finko AM, Capital Service, Express Credit, and Finko UA – which represents around €40 million (which equates to half) of the total exposure for defaulted lending companies.
For the cases in recovery – we collected €1.61m out of the planned €1.65m (97%) (as shown in image below). Overall, there are no changes in the estimates from previous quarters.

- There are also a number of cases where litigation activities have progressed or were about to be submitted at the end of Q2. This includes GetBucks BW, GetBucks ZM, Dziesiatka Finanse, and Wowwo – which represent €28 million (or 34%) of the total exposure for defaulted lending companies (€81m). For these cases, more info is expected over the next two quarters. Please note that we always look to mutually agree on a solution with these lending companies as this gets the best outcome, but if a lending company is unwilling to reach a reasonable solution, we will go down the legal route.
- For those cases with no movement or very limited information (due to various reasons), such as Alexcredit (the war in Ukraine) and Cashwagon PH and VN (untransparent liquidation and criminal charges, respectively), there’s around €11 million (or 14%) of total exposure.
During Q2, Cashwagon Indonesia was finalized as liquidation of the entity by the administrator was carried out. Even though a total of around 30% of the exposure has been recovered since the company first defaulted, most of this was recovered before the liquidation commenced. This is an example of why we first try to search for alternative ways of recovering the funds – as a forced liquidation, in many cases, doesn’t necessarily lead to the biggest payout.
Lastly, Russian lending companies (which we explain more about below) were moved to the “suspended” status, given that severe restrictions on payments have been imposed, which resulted in no payments received during Q2.

Status of Russian lending company funds
1. How and when does Mintos expect to solve the issues with Russia/Ukraine loans? What about alternative payment channels to receive money from Russia? Are you working on this?
Firstly, we’d like to remind investors about our article on the Russia-Ukraine war impact updates. This article is updated regularly and discusses in detail the progress on Russia-Ukraine-related matters. Plus, we have further articles describing the exclusion of Russia from the international economy and sanctions and Russian retaliation.
Below, we’ve summarized the current situation for investors on Mintos.
Payments from Russian lending companies
Currently, Russian lending companies can’t transfer payments in EUR due to imposed local limitations. However, they can make 10 million RUB of payments per month. Since the beginning of August, we’ve been able to receive these payments in an FX account where the RUB payments are automatically converted to EUR (10 million RUB is around €140k as of 26 Aug 2022).
A payment of 10 million RUB has already been received from one lending company, Revo. And for the remaining lending companies, we’re finalizing additional paperwork so they can pay to our FX account. In the short term, the 10 million RUB payments will be used to settle the funds in recovery from Russia.
Although the new FX account is a step in the right direction, we’re actively looking into alternative payment routes so we can receive larger payments and recover funds faster in the medium term (next 2-4 months). However, these can take some time to set up. If the imposed limitations change, it will affect the speed of the recovery process.
Because we don’t want to risk the success of establishing new payment routes, there’s a limited amount of information we can share at this stage. Importantly, all payment solutions must comply with current European and Russian sanctions and limitations.
Payments from Ukrainian lending company
Payments out of Ukraine are currently not possible. So far for the one lending company we cooperated with in Ukraine, a small payment was received that was made by their related company outside of Ukraine. The possibility of receiving payments from the Ukrainian lending company is largely dependent on the resolution of the war situation.
2. Are Russian loan companies cooperative, or is there a high risk that they’ll refuse to pay back the money?
We’re in constant dialogue with the Russian lending companies and are actively looking for solutions. So far, all of them are still in operation, despite early concerns in March that the Russian economy would be significantly hurt in the short term. These companies are showing reasonably healthy performance, and none of them have declared that they won’t pay back investor funds. Many of these companies have shareholders or other businesses outside of Russia, ie. in Europe or elsewhere. In the unlikely scenario that they would take a step to not honoring liabilities to investors, they would be severely risking their businesses in other countries which also depend on external funding, as such information would become public.
What is of real concern to them are their liabilities that are denominated in EUR. Though the exchange rate now is favorable to them, if the situation reverses, which is not an unlikely scenario, and goes back to as it was in March or even worse, they might not be able to cover all their liabilities. This is an ongoing discussion point with several of these lending companies.
3. Other p2p platforms, such as Peerberry, are recovering loans in Russia/Ukraine from platform profit. Thus keeping investors out of harm. Why is Mintos not doing this?
We can’t comment on other p2p platforms, but based on our understanding, none of these platforms can cover these investors’ investments on their own. This is because they don’t earn sufficient margins. For example, in a year, a platform might earn 1-3% from its outstanding loan volume. Instead, it’s other lending companies within the same group as the platform that are covering the payments, similar to a group guarantee. Mintos operates as an intermediary between the investors and lending companies – not as a lending company, so we’re unable to employ the same practices.
General questions about funds in recovery (and more) on Mintos
4. What is Mintos doing to prevent more companies from going into funds in recovery? How will Mintos better protect investors?
Firstly it should be noted that lending company defaults and respective funds going into recovery is a normal part of the business and cannot be fully eliminated. When additional investment opportunities are provided by lending companies, our aim at Mintos is to a) limit the number of these situations, and b) have recovery options when such situations occur, so that at the portfolio level Mintos still provides good returns for investors. You can read more about our due diligence process and how we deal with lending company issues on our blog.
Historically, since Mintos started its operations 7 years ago, there have been two global events that were hard to predict, the Covid-19 pandemic and the Russian war in Ukraine. Besides these events, there have been a limited number of defaults spread throughout these years.

Even with these defaults and the impact of Covid, which saw more companies defaulting in 2020, the portfolio level returns after defaults have been very competitive.

This does not mean that we stop at what has been implemented. When looking at historical cases when lending companies have gone into default, there hasn’t been a case where we failed our initial due diligence, as evidenced by the fact that none of the lending companies connected over the last few years went into default shortly after starting offering loans on Mintos. We believe that we have also improved the speed at which we suspend further investments when there is an increased likelihood that a lending company will default or that payments from a company will be disrupted.
We see the biggest opportunity for improvements in recovering funds from defaulted lending companies. With the launch of Notes as regulated financial instruments, we have moved to a structure where the underlying loans are pledged as collateral. Based on our experience with recoveries so far, such structures have a higher recovery potential. The regulated setup of Notes also means that we can more easily file legal claims against lending companies should the need arise. Additionally, in some countries we have additional measures in place that further increase security for investors, notably the trust setup for Mexican lending companies. We believe that these improvements will further improve the amount of funds that can be recovered should any new funds go into recovery.
5. The pending payment % is too high.
We are aware of the issue with higher than usual pending payments arising from regular money transfers, and we agree that they are currently too high. It is important to note that these mostly arise from 3 lending company groups (Creditstar €8.3m, ID Finance €18m, IDF Eurasia €17.5m) that we have already restructured with favorable terms to investors. You can read more about this in the pending payments updates.
6. How can Mintos let ID Finance and Creditstar abuse Pending Payments? If they really paid, that money should be directed to customers and not reinvested.
Investments in loans issued by ID Finance (Spain and Mexico) and Creditstar have decreased significantly over the last few months, especially after the Russian invasion of Ukraine. As a result, compared to previous months, both lending companies had to transfer significantly more money to investors for borrower repayments than they received in new investments.
Since February 2022, both lending companies have been transferring as much as they can without jeopardizing their businesses and potentially harming investors. Transferring more would make it hard for them to issue new loans and maintain their portfolios and revenue. Without issuing new loans, both companies’ portfolios would shrink quickly, and revenue would drop accordingly while operating costs couldn’t be adjusted that quickly. As a result, they would run into difficulties that would directly and negatively affect all investors.
To ensure the best chance of fully recovering the outstanding amounts, the pending payments have been restructured. Pending payments for ID Finance Spain and Mexico in the amount of €18 million have been restructured. ID Finance has to cover the outstanding amounts by 31 December 2022 at the latest. For Creditstar, pending payments in the amount of €8.3 million have been restructured. Creditstar also has to cover the outstanding amounts by 31 December 2022 at the latest.
Given that both businesses are operating well and the loan portfolio quality is stable, it is therefore in the best interest of investors that the companies are given time to attract new financing to refinance outstanding pending payments so they can maintain sustainable businesses.
To ensure investors are receiving adequate interest for the period, the interest for ID Finance’s restructured pending payments has been increased from 1.2x to 1.4x the base interest rate of the investment starting from 22 July 2022. On average, investors will receive 17.6% interest on the restructured pending payments, which is significantly above the current average market rate.
The interest for Creditstar’s restructured pending payments has been increased to 18% from 22 July 2022. Plus, to compensate investors for rolling over their investments, Creditstar paid a one-time “sweetener” of 1% of the rolled-over amounts on 1 August 2022.
Both companies have committed to not increasing pending payments further. If either company fails to honor the agreement, we would look into initiating legal proceedings.
7. Are you planning to share more detailed financial info on Creditstar and ID Finance so investors can assess how their repayment capabilities actually are?
ID Finance Spain has published audited financials for H1 2022. We’ve reached out to ID Finance Mexico and Creditstar, and will share their financials as soon as we have them.
8. How could ID Finance be allowed to do a CB campaign when they’re due on payments?
First, we need to look at the underlying reasons why the company has increased pending payments. In cases when pending payments have increased due to a drop in investment volumes in Notes for a specific lending company, we might allow the lending company to offer a cashback to help it attract needed funding, however, in such cases we also inform investors about the company’s pending payments and overall situation. This ensures investors are aware of the situation and can make informed decisions whether to invest in the respective Notes.
9. What happened with the monthly updates about recovered loans via mail?
A few months ago, we made a change as to who receives the monthly recoveries update email. For now, we are only sending the monthly recovery email to those investors where some form of recovery had occurred in their account during that month. For those who don’t receive the monthly email, please note that you can view the exact same information on the Funds in recovery update page at any time. This page is updated monthly with the latest information on funds in recovery.
10. What does a guarantee of repayment mean if I don’t get the money after all?
For the vast majority of cases, the buyback obligation works well, and investors receive back their funds for non-performing loans. It’s only when the issue spreads to the entire lending company that the buyback obligation cannot be exercised as planned. For example, Wowwo fulfilled its buyback obligation and loans that were 60 day past due from borrowers were bought back from investors. However, the situation changed when Wowwo stopped all payments towards investors on Mintos and is not honoring its obligation.
Read more about the buyback obligation.
11. Will you create an option to opt out of certain countries when auto investing? This would save us a lot of money in the future.
On Mintos, there are 2 ways you can auto-invest: using the predefined Mintos strategies or custom automated strategies. With a custom automated strategy, you choose from more than 15 different investing criteria – including which countries you’d like the strategy to invest in. Because there’s already an option for investors to customize country selection themselves, there’s no plan to implement country selections for the predefined Mintos strategies. Nevertheless, we might review the current Notes selection criteria of the Mintos strategies based on feedback received from investors.
12. Why has Mintos become so bad at paying back customers in difficult situations? Other P2P services perform much better.
Historically, many p2p platforms have operated as mono-lenders facilitating investments for just one group of lending companies. Here, if an issue arises, it’s a binary outcome – either they survive or they don’t. In 2019 (and early 2020), we saw some of these platforms shut down completely.
Unlike these p2p platforms, Mintos operates as an intermediary between investors and many different (and mutually unrelated) lending companies and groups of companies. Hence, it’s only natural (although unfortunate) that when market downturns occur, some of these companies may default for one reason or another.
Lending companies have been affected in various ways across downturns in the market over the past 2 years. Since the initial impact of the Covid-19 pandemic in 2020, several lending company-related problems occurred during the spring-autumn period of 2020. But since August 2020, there have only been two companies, namely ECash (which was also impacted by Covid-19) and Wowwo, that experienced financial difficulties – impacting their ability to make repayments to investors.
Then as discussed above, the war in Ukraine and the limits imposed on Russia significantly impacted the ability of Mintos to receive repayments from Russian lending companies.
Lending company-specific questions about funds in recovery
13. Can we have an update on the Wowwo situation (can you indicate which specific actions have been initiated for the recovery of Wowwo funds and what their status is?) Have investors lost all their money?
As mentioned in our recent recovery update (on 4 August 2022), we cannot share any information on the case with investors on Mintos. All arbitration proceedings are strictly confidential. Once the case is concluded, we’ll inform you about the outcome, including any amounts recovered from Wowwo, plus legal fees and other expenses incurred. Please understand that court proceedings take time. We expect to be able to share the next update in about 3 to 4 months.
- Country: Turkey
- Suspension: 13 December 2021
- Principal exposure at suspension: €18.02 million
- Recovered principal so far: 0
- Current principal exposure: €18.45 million
- Disclosure: Limited
- Expected recovery: 75-100%
- Timeline: 2025
- Expected recovery 3Q22: 0
14. Can we please get an update on the Dineo Credito situation?
In July 2022, Dineo Credito decided it would not transition to the Notes setup on Mintos, and therefore chose to wind down its operations on Mintos. Although Dineo Credito is in good financial shape generally, it was unable to pay back all investor funds in one single payment on the date that it decided to wind down its operations on Mintos. This is not a Mintos specific issue, as most companies can’t replace financing right away. If it wasn’t for the regulatory limitation that we can’t offer investments in loans via claim rights anymore, the wind-down would be done by gradually decreasing loans available for investment, which would not result in a suspension. As this is not possible, Dineo Credito was transitioned from “Pending payment” status to “Suspended” status on Mintos at the end of July.
Now, Dineo Credito is working hard to source funds to repay the total amount that’s owed to investors on Mintos. We have already agreed on a repayment schedule where they will start repaying principal at the beginning of October in weekly installments (at the minimum) and if they find a funding source sooner, they are committed to making faster repayments.
Dineo Credito is still in healthy cooperation with Mintos, and we expect that they will be able to repay investor funds by the end of this year. We will continue to update investors as we find out more from Dineo Credito about progress with these repayments. Please note that investors will receive all pending payment interest.
- Country: Spain
- Suspension: 29 July 2022
- Principal exposure at suspension: €1.44 million
- Recovered principal so far: 0
- Current principal exposure: €1.44 million
- Disclosure: Full
- Expected recovery: 100%
- Timeline: 30 December 2022
- Expected recovery 3Q22: Pending payment interest only
15. Why don’t I notice any recoveries in my account even though Capital Service Poland is making monthly payments? Plus, can we have a general update on its recovery process?
We distribute funds to investors as per the Waterfall clause in the Mintos Terms and Conditions. Loans are repaid in historical order from the oldest to the newest. First, loans with underlying borrower repayments are covered, then loans that the lending company repurchased are covered, then loans that are 60+ days late are covered.
At the time of default, Capital Service’s principal exposure was €19 million affecting around 60 thousand investors. Capital Service has made payments according to the restructured agreement and has repaid €2.2 million so far. As a result, the current recovery rate right now is 13.9%. Out of the roughly 60 thousand investors impacted, at this moment around 53% have received at least some repayments (41% at end of Q1 as communicated in AMA in April) from Capital Service.
- Country: Poland
- Suspension: 6 April 2020
- Principal exposure at suspension: €19.05 million
- Recovered principal so far: €1.79 million
- Current principal exposure: €17.28 million
- Disclosure: Full
- Expected recovery: 75-100%
- Timeline: 2026 – 2028
- Expected recovery 3Q22: €0.37 million
16. Are there any updates on Finko Armenia and Ukraine? How much is Finko Armenia lagging with payments? Please provide more insight on what the performance and outlook is.
Finko Armenia
The companies performing recoveries are contacting borrowers where possible and either collecting payments or agreeing schedules on how payments can be done. As a result, funds are being recovered. We are providing monthly funds in recovery updates for this process. Please note that given there are no penalties or interest that can be charged to the borrowers, it limits the possibility of recovering debts that are long past due. The recovery process will continue as long as the recovery costs are less than the money recovered.
- Country: Armenia
- Suspension: 25 March 2020
- Principal exposure at suspension: €27.35 million
- Recovered principal so far: €14.34 million
- Current principal exposure: €13.01 million
- Disclosure: Full
- Expected recovery: 50-75%
- Timeline:2026
- Expected recovery 3Q22: €0.46 million
Finko Ukraine
Finko Ukraine’s repayment schedule consists of two streams. The first was from the Finko UA’s operational income from borrowers’ repayments and debt collection, which is now disrupted due to the war in Ukraine and remains highly uncertain. The second stream is from claim rights that were secured as an additional source for repayments as result of our negotiations. We expect that the full exposure of Finko Ukraine will be recovered.
- Country: Ukraine
- Suspension: 21 August 2020
- Principal exposure at suspension: €16.78 million
- Recovered principal so far: €9.54 million
- Current principal exposure: €7.23 million
- Disclosure: Full
- Expected recovery: 75-100%
- Timeline: 2025
- Expected recovery 3Q22: €0.25 million
17. Kviku seems to be present in other countries (in Europe as well). Why can’t it cover its Russian payments from a European branch?
Yes, Kviku is present in other countries. However, it doesn’t have the legal obligation or currently the willingness to cover repayments that are due from its Russian business from other sources. It should also be mentioned that based on our understanding the businesses outside of Russia are just a fraction of the company’s exposure at Mintos, so even if the company became more willing to cover its liabilities from these sources, it could only be for a relatively minor part.
18. Is there any update on Dziesiatka Finanse Poland?
The first hearing for Mintos’ claim against Dziesiatka Finanse Poland took place in Latvian court on 4 July. To give both parties time to review the submitted materials, the court decided to postpone the review of the case until the next hearing on 23 September, according to procedural norms. Up until this point, we will have no new information to share with investors on Mintos. For detailed information on this case, see the funds in recovery updates.
- Country: Poland
- Suspension: 18 June 2020
- Principal exposure at suspension: €1.01 million
- Recovered principal so far: €0.42 million
- Current principal exposure: €0.59 million
- Disclosure: Reasonable
- Expected recovery: 25-50%
- Timeline: 2022
- Expected recovery 3Q22: 0
19. What’s the status of AlexCredit Ukraine?
The collection company working on AlexCredit’s portfolio is still waiting to transfer the collected funds in the amount of approx 1.55 mill UAH (€51.6k) to Mintos. The company aims to reach ~50% of the pre-war collection level by August/September. We are looking into additional ways to transfer the cash that has already been collected to Mintos. Please note that the UAH has devalued by 25% since the end of July, and we expect a corresponding impact on recovered amounts in EUR.
- Country: Ukraine
- Suspension: 28 March 2020
- Principal exposure at suspension: €4.42 million
- Recovered principal so far: €0.20 million
- Current principal exposure: €4.42 million
- Disclosure: Full
- Expected recovery: 0-25%
- Timeline: 2022
- Expected recovery 3Q22: 0
20. Any information about GetBucks Botswana? What’s going on there?
As per our most recent funds in recovery update, The court process in Botswana has moved forward, and we can now share more insight, as the process is ongoing and the other party has seen our arguments provided to the court. Sharing more detailed information earlier would have harmed investors’ interest (this holds true for all other cases where we go with the litigation route). The claim in the court process is that GetBucks Botswana (legal name FirstCred) cannot cover its liabilities to creditors and, therefore, should be winded down by an appointed liquidator.
By doing this, the assets would be sold, and the money would be divided among the creditors. We have made the claim together with another creditor. This approach was chosen because, for a long time, the management of GetBucks Botswana hasn’t been genuine in looking for resolution while using investors’ money for other purposes. Since the beginning of the court process in early June, several legal procedures have taken place, including a court hearing on 2 August. The initial court opinion is expected to be heard on 30 August 2022. Mintos has also paid a security deposit of €30k to the court, which was required for the court process to continue.
There’s no news about the MyBucks bankruptcy proceeding in the court in Luxembourg.
- Country: Botswana
- Suspension: 30 April 2020
- Principal exposure at suspension: €7.35 million
- Recovered principal so far: €2.21 million
- Current principal exposure: €5.14 million
- Disclosure: Limited
- Expected recovery: 25-50%
- Timeline: 2026
- Expected recovery 3Q22: 0
Thank you all for sharing your questions and helping us address what is most important to you when it comes to funds in recovery on Mintos.