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At Mintos, we are dedicated to giving you the utmost transparency. This is why we are pleased to introduce risk ratings for loan originators offering their loans on the marketplace. The Mintos Ratings are on a scale from “A+” to “D”, representing the lowest and the highest counterparty risk respectively.
What does the Mintos Rating measure?
The Mintos Rating is meant to be a gauge for each loan originator’s financial and operational stability. At Mintos, we emphasise the loan originator’s ability to service and originate loans as being the most important when assessing loan originators. In addition, the financial standing of the loan originator is a material factor when the buyback guarantee is provided to investors. In a recent article, we provided an in-depth analysis of whether the loan performance or loan originator is the most important factor when investing in loans on the Mintos marketplace. You can read it here.
Ultimately, the Mintos Rating measures the counterparty risk or risk of loss resulting from a loan’s originators’ failure to service and/or transfer the received payments from borrowers to investors or meet other contractual obligations (including but not limited to the buyback obligation). Counterparty risk is capturing operational and default risk of the company acting as a loan originator, servicer of loans and obligor of the buyback guarantee to investors. The materialisation of those risks would cause a disruption in loan servicing and the buyback fulfilment which are the core risks related to loan originators on Mintos.
Core factors for the Mintos Rating
The rating is driven by five core factors characterising each loan originator.
You can read more about the Mintos Rating methodology.
What data is used?
The Mintos Rating is based on information obtained during the initial due diligence process and data from ongoing monitoring. This includes the primary information from loan originators such as management interviews, site visits, audited and interim financial statements, corporate presentation, credit policy and risk control documents. For more information, follow this link.
The Mintos Rating will be updated annually, except in certain instances where a loan originator’s rating requires an immediate change. This could be due to a cash injection, positive or negative regulation being implemented in the country of the loan originator and so on.
You can read an in-depth description of the Mintos Rating on our website. If you have any questions, please don’t hesitate to get in touch with our investor service team at [email protected].