The latest Mintos Risk Score updates based on developments and data from the third quarter of 2021 are now live on the Mintos platform. In this article, we share the general summary of the most recent quarterly changes and all other details can be found on the Mintos Risk Score Updates page. An overview of historic changes of the Mintos Risk Score through the quarters is also available as a spreadsheet on the Updates page.
Overview of changes in the Mintos Risk Scores and subscores based on Q3 2021
Currently, we’re finalizing details related to the Mintos transition to the loan-backed securities Notes. At the same time, our activity of onboarding new companies on the platform is also in a phase of adjustments to the most recent requirements resulting from Mintos becoming a regulated investment firm. Because of this, no new lenders are added to the list shared with this update.
When it comes to the evaluation of loans from the lending companies present on the platform, no major changes are being made with this update. The changes made are not due to general macroeconomic dynamics as we’ve seen in previous updates, but are mostly related to the individual efforts of lending companies as a result of their business activity and portfolio management.
This update delivers changes for loans as investment opportunities by 14 companies and/or their entities on Mintos, and none of these changes are Mintos Risk Score or subscore downgrades.
The score was withdrawn for 4 cases.
The Mintos Risk Score was upgraded for loans from 2 companies. When it comes to upgrades of the subscores, these are mostly made in the categories of Loan Portfolio Performance and Buyback Strength.
2 reasons behind score withdrawals
For loans from Creditstar’s entity in the Czech Republic, Eleving’s Bulgarian entity, and loans from Zaim Online, the score is withdrawn as of this moment. These entities have no listed active loans on the platform. In case of changes in activities of these companies, these will be reflected in the upcoming Mintos Risk Score updates.
Although we’ve been carefully monitoring Turkish lender Wowwo over time and without red flags in the company’s business itself, this December we had to reach for the suspension of the company from the Mintos platform. We did it to protect investors’ from exposure to loans currently marked with high currency risk – a result of continuous Lira inflation and a rising difference in value compared to the Euro.
Mintos Risk Score updates schedule
The regular schedule for the Mintos Risk Score updates is quarterly. 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.
Note that if you want to adjust your investment preferences based on the most recent Mintos Risk Score updates, you need to update your investment strategies.
Mintos Risk Score methodology
The Mintos Risk Score is an aggregate of four subscores that are assigned to four different aspects of particular loans as investment opportunities. These subscores rate:
- loan portfolio performance (the portfolio health and historical performance of the loan book),
- loan servicer efficiency (the capabilities of the loan servicer when it comes to the collection of borrowers’ payments),
- buyback strength (the buyback obligor’s ability to fulfill contractual obligations, meet liquidity needs, and capital sufficiency), and
- cooperation structure (the legal setup between the loan issuing company and Mintos).
According to the significance we see in each subscore, the weights of the subscores are loan portfolio performance 40%, loan servicer efficiency 25%, buyback strength 25%, and legal structure 10%.
The Mintos Risk Score and subscores are expressed on a numerical scale from 10 to 1, where 10 represents a low risk and 1 represents a high risk. The score can also be shown as “Score Withdrawn”, with a value of 0, when one or more subscores are not available, or simply when there are no loans available for investment by a specific loan issuing company.
Here you can learn more about the Mintos Risk Score methodology.
Disclaimer: Under no circumstances should the Mintos Risk Score be treated and relied upon as a credit rating. It is not prepared in accordance with the methodology and provisions defined by the Regulation (EC) No 1060/2009 on credit rating agencies. The Mintos Risk Score is not investment advice and Mintos cannot be held liable for any losses which may result from basing investment decisions on information and/or analytical materials provided on this website.