We’re sharing the Mintos Risk Score updates based on monitoring and evaluating data from Q4 2020. On the Mintos Risk Score updates page, you will find information about all changes made to Mintos Risk Scores and subscores for particular loans, and you can download a spreadsheet that contains all quarterly changes.
Overview of changes in the Mintos Risk Scores and subscores based on Q4 2020
Evaluation of data based on the fourth quarter of 2020 gave us a clear perspective on how companies managed their portfolios, volumes, and debt collection, and how they ran their lending business in general in the year of the pandemic. We found that most companies that managed to stabilize their operations by Q3 2020 didn’t see significant changes in the last quarter of the year.
As a result of our evaluation, the Mintos Risk Score is upgraded for loans issued by 5 out of 90 entities included in this update. The score is downgraded for loans issued by 1 lending company. The score is withdrawn (SW) for loans in three cases: In 2 cases the companies exited Mintos due to a new funding source (Capitalia and Mogo Kazakhstan), and in 1 case there are no outstanding investments in loans from a lending company (Stik Kredit, Bulgaria). DanaRupiah, the lending company from Indonesia that joined Mintos just before the beginning of the pandemic, is now active on the marketplace with a newly assigned Mintos Risk Score.
The Loan Portfolio Performance subscore is upgraded for loans issued by 7 lending companies, and no downgrades are made. Stabilization of issuance volume volatility is one of the main reasons for upgrades in this subscore, in addition to showing stable non-performing loan rates for the past two quarters.
The Loan Servicer Efficiency subscore is upgraded for loans issued by 2 lending companies and downgraded in 1 case. Upgrades came from continued improvements in risk controls and internal processes, such as tightened scoring rules as a response to market dynamics in 2020.
The Buyback Strength subscore is upgraded for loans offered by 2 lending companies, while for loans from 4 companies the subscore is downgraded. The end of the year provided a better view of the overall financial stability the companies managed to keep over the year, but also on the level of their equity and overall profitability.
The Cooperation Structure subscore remained unchanged for all evaluated loans.
To see detailed comments about all the latest changes in the Mintos Risk Scores and subscores, visit the Mintos Risk Score updates page.
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, please do so as soon as possible.
About 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.
We invite you to join a conversation about this topic on the new Mintos Community Forum.
