SECURITY

Mintos Risk Score

To help you make informed decisions about investing in Notes, we evaluate investment risk with the Mintos Risk Score. The Mintos Risk Score for Notes is calculated from 4 subscores assigned to the underlying loans, based on the lending company’s loan portfolio performance, the efficiency of loan servicing, buyback strength, and legal setup between the lending company and us.

How the Mintos Risk Score works

The Mintos Risk Score and subscores evaluate a lending company’s loan offering. Before Notes can be offered for a new lending company, we assign the initial scores based on our due diligence checks during the company’s onboarding. And as long as Notes for the lending company are offered on Mintos, we keep monitoring the company and regularly update the scores based on our findings.

Subscores

Subscores grade four aspects of loans available for investment as Notes. The Mintos Risk Score is calculated by weighting points from the subscores: 40% loan portfolio performance, 25% loan servicer efficiency, 25% buyback strength, and 10% cooperation structure.

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SW 10987654321

Mintos Risk Score

The Mintos Risk Score rates the risk level of a particular Note on a scale from 10 (low risk) to 1 (high risk). The calculated score is rounded to the nearest integer.

The Mintos Risk Score can be withdrawn if one or more of the subscores is not available, and this is expressed with the value “Score Withdrawn” or (SW).

S D

Statuses

When the Mintos Risk Score is shown for a particular Set of Notes, the lending company providing the underlying loans is "Active".

Status Suspended (S) means that all activities on the Primary and Secondary Markets for Notes backed by loans from a specific lending company are stopped on the platform, until further notice.

The lending company can become Defaulted (D) based on predefined criteria. This means that no new Notes backed by loans issued by this lending company will be available for investment, and existing Notes will be removed from the Primary and Secondary Markets.

Mintos Risk Score and subscore scale

Evaluation of low or high risk on Mintos is relative only to other Notes on the platform. To get the full picture of the risk associated with specific Notes, also review the related subscores.

10

9

8

Lower-risk range

All or most of the aspects of the loans underlying the Note are performing well.

7

6

5

Mid-risk range

Some of the aspects of the loans underlying the Note are performing well, while some don't perform as well.

4

3

2

1

Higher-risk range

Some or most of the evaluated aspects of the loans underlying the Note have elevated risk in performance.

Subscores
Loan portfolio performance
The health and performance of the loan book relative to the cost of serving the portfolio.
Loan portfolio quality
Historical and current loan repayment trends
Historical and current loss rates
Issuance volumes
Track record seniority
Product characteristics (e.g. liquidity of the collateral)
Loan servicer efficiency
The capabilities of the loan servicer when it comes to collection of borrowers’ payments.
Financial profile, business procedures, compliance, and quality control
Company’s management and internal risk controls
Loan administration structure and processes
Management of non-performing loans
*
Please note that in some cases, loan servicer and loan originator might be two separate business entities.
Buyback strength
The buyback obligor’s ability to fulfil contractual obligations, meet liquidity needs, and capital sufficiency.
Financial profile, performance, and projections
Management experience
The business regulatory and legal environment
Diversification of revenue streams and geographies
*
Please note that in some cases, buyback obligor and loan originator might be two separate business entities.
Cooperation structure
The legal setup between the lending company and Mintos.
Access to borrower-related cash flows
Recoverability potential based on the legal setup
Transparency of cooperation structure for investors
SW
Score withdrawn (SW)

The Mintos Risk Score can be withdrawn if:

there’s not enough information to calculate one or more subscores
the lending company has been inactive on the platform for a prolonged time
the lending company’s status is “Defaulted” or “Suspended”

How often are scores updated?

The Mintos Risk Score is updated quarterly, based on the monitoring of financials, loan portfolio quality, track record of the management, status of the business environment, and more. Material improvements or deterioration in these factors can result in an immediate upgrade or downgrade of the related subscores and might cause an upgrade or downgrade of the Mintos Risk Score for the Notes backed by loans issued by a lending company.

What can cause a downgrade?
  • The non-performing loan ratio deteriorates
  • Regulation changes for the worse
  • The lending company undergoes forced restructuring
  • The lending company defaults on a financial obligation
What can cause an upgrade?
  • The lending company significantly improves its debt collection or risk based scoring, resulting in better loan performance and payoffs
  • The lending company receives a capital injection
  • Regulation improves
  • The lending company improves its market position, product offering, and income diversification

Under no circumstances should the Mintos Risk Score be treated and relied upon as a credit rating 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.

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