New product: Mintos Invest and Access – What it is and My Opinion

Mintos will launch a new product offer called Invest & Access tomorrow. It was already unveiled and presented at the P2P Conference in Riga on Friday. Before I write about it watch the video below for about 10 minutes with Mintos CEO Martins Sulte explaining Mintos Invest and Access.

invest and access presentation riga
the video should autostart at the right point. If not it is at 2:29:22

The new offer makes it super-easy for investors to invest and automatically diversify through a very wide selection of loans. Mintos does that by investing the money in all loans on the platform that carry a buyback guarantee and are from originators that are at least 6 months on the platform. Mintos promises that investors will be able to cash out easily (subject to market demand) instantly, saying investors don’t need to bother about handling the loan selling on the seondary market. Mintos does that by selling the non-late loans to other investors.

The investor can still see how the portfolio he holds is composed on an overview page. One important aspect for the market dynamics on Mintos marketplace is that Invest & Access will invest before the autoinvests.

Mintos is cleary aiming to make it easy for new investors that don’t want to spend much time thinking about the investment and optmizing yields by giving them the average yield by just one click. The Invest & Acesss page will show the weighted average interest rate, which at the time I saw that page was showed as 11.98%. But the figure will change and update as market conditions fluctate and as the FAQ says it is not guaranteed.

One important point in the FAQ/footnotes is that the ‘instant access’ only applies to current loans. That means if the investors has e.g. 15% late loans, that would mean that he gets only 85% as instant withdrawal and for the remaining 15% has to wait until either the loan is bought back by the buyback or becomes current again (I suppose in that case the investor could trigger another cashout).

Investors can runs both Mintos Invest & Access as well as the existing autoinvests, should they which, but in that case Invest & Access would use any available cash the investor has first, therefore I would guess that there are rarely any funds left for the autoinvests to use.

My Opinion on Mintos Invest and Access

Mintos clearly offers a product that makes it as easy as possible, lowering the entry hurdles especially for new investors. And as Bondora Go&Grow shows there is a high demand by investors for simplified products. Statistics published by Bondora show that in April 2019 63% of the new investments in that month where conducted via the Go&Grow product, which is constantly gaining over the other investment methods Bondora offers. Other examples are the Access products offered by British Assetz Capital.

Looking at it from the perspective of an investor that is a little more experienced and willing to spend a little time Invest & Access does not seem an attractive offer. By definition it offers the weighted average interest rate.

By setting up own autoinvests at Mintos, keeping a good diversification and foregoing the highest risk, investors can currently achieve about 13-14% yield on Mintos. So if they would instead use the new product they would have about 2-3% lower yield, and have actually less control on which originators they invest in. An important point to consider, is that the value Mintos shows you, is the average interest rate, NOT the expected average yield. The yield will be significantly lower than the interest rate as Mintos will include buyback loans from originators with long grace periods or originators that do not pay interest income on delayed payment. Excatly those are typically avoided when investors configure their own autoinvests.

And concerning the argument of liquidity. Mintos is very liquid anyway. Without using the new product it is no problem to liquidate a portfolio within a few minutes to  a few hours it just depends on the price. Sure you might have to offer a discount. Maybe depending 0.2%-0.6% on average. But that is a small price if you had the higher yields before.

So would I recommend using Invest & Access over the ‘traditional’ way of setting up own autoinvest? There is one use-case I would. If an investor wants to invest very short-time (for whatever reason ‘parking’ money) for less than say 120 days, than it is worth considering.

In my opinion on why Mintos launched the new product, there are actually two reasons:

  1. there is demand for a simplified product and this new product shall satisfy that
  2. the new product will help on the sales site for attracting and onboarding new orignators. Originators that can only offer rates that are below the average interest rate on the Mintos platform so far were hard to sell. With Invest & Access they will be just part of the bundle and automatically sold (once the originator has been on the platform 6 month)

That brings us to an interesting point. How will Mintos Invest & Access the market dynamics? The big factor here is that Mintos Invest & Access happens BEFORE autoinvest and manual investment. There are already (even before launch) speculations and fears of investors that it might bring down interest rates or ‘force’ them to use the new product to avoid cash drag, but I think it is much to early to make any prediction what might be the outcome. But I sure am curious what this will do to the activity on the Mintos marketplace.

What are your opinions on the new product? Please share them in the comments. Thx.

mintos invest and access

P.S.: The following interview with the Mintos CEO was recorded just before the announcement of the new product, therefore it does not cover Invest and Access – but it has a lot of information on the current state of Mintos.

(Source: Bernhard Hummel)

Up to 5% Cashback On Long-Term Investments Offered by Mintos

Lativan p2p lending marketplace Mintos just launched a cashback campaign running for the remainder of December. Investors investing in new loans with a term of at least 24 months on the primary market will receive a cashback of 2% to 5% depending on term length. The cashback will be credited within 6 days says Mintos.

This is a big bonus that goes on top of the 12 to 14% interest rate that these longer term loans at Mintos typically carry.

Important: To be eligable an investor needs to enroll once for the campaign by clicking on the promotion banner inside the Mintos dashboard.

New investors can even get an additional 1% cashback on all investments made within the first 90 days of registration (credited monthly) by registering via this link,

Most loans on Mintos are in EUR currency, but other currencies are available, too. Only recently Mintos started listing loans in GBP currency too.

See the P2P Banking cashback page for more cashback offers.

mintos cashback

“Investing long-term has many benefits. Loans with a maturity of two years and more on average have higher interest rates. As the maturity of these loans is longer, these higher rates can be locked-in for longer as well, thus avoiding cash drag effect. Also, investing in long-term loans allows for a better diversification, because this way investors can access types of loans and borrowers that have a different profile than the average short-term loan takers. We hope that in combination with our cashback campaign, all of these benefits will help our investors reach their investment goals in a more efficient and rewarding way,” says Martins Sulte, CEO and co-founder of Mintos.

Fellow Finance Now Offers Loans to German Borrowers

Peer-to-peer lending platform Fellow Finance is now open for borrowers in Germany. Wirecard Bank supports the Finnish FinTech company Fellow Finance to enter and provide a digital infrastructure for the German financial market. Wirecard Bank will place their German full banking license at the Fellow Finance’s disposal and in addition enabling a completely digital credit process.

Under German regulation (KWG) only banks are all allowed to make loans, meaning all p2p lending platforms need to partner with a transaction bank.

It is not a full p2p lending offering as investors cannot invest into the German loans on the platform. And Fellow Finance states in their TOC that they do not advise borrowers regarding the loans. So it looks to be an attempt to capitalize on the reach of the brand. The website for the German market is running on the national domain Fellowfinance.de.
Update: While the German website explicitly states that retail investors cannot invest, the wording might be misleading and actually might mean only that investors need to go through the Finnish site in order to invest. On the Finnish site the ability to filter for German consumer loans and to set up allocators (autoinvest) for German loans is present.

Jouni Hintikka, CEO at Fellow Finance, says: “We are looking forward to working with advanced Wirecard Bank as a co-operation partner in the future. We are proud of the entry into the German market after having already proven our business model in Finland and Poland. This is again one step of making Fellow Finance the biggest consumer and business lending platform in Europe and proves the scalability and flexibility of our platform.”

Thorsten Holten, Executive Vice President Sales Financial Institution and FinTech Europe, adds: “Gaining Fellow Finance as a customer means that we can expand on our collaboration in the area of alternative lending with the aid of an international partner. With our expertise in the areas of banking and regulations, we help FinTech companies such as Fellow Finance to enter the market in the best way possible as well as to quickly and easily internationalise their business.”

In future, Wirecard Bank will support Fellow Finance in the scoring of potential borrowers and carrying out payment transactions. This means that end consumers in Germany will be able to quickly apply and raise a loan in competitive interest rate.

The German market is very competitive and so far p2p lending marketplaces have found out it is not easy to compete with the banks. In Germany Auxmoney is the largest p2p lending marketplace offering consumer loans.

New Lendy Cashback Offer 50 GBP for New Customers

Lendy logoFor investors, that considered using the Lendy platform, but have not yet signed up, now may be a very good time to do so, as Lendy is offering 50 GBP cashback to investors that invest at least 1,000 GBP on the condition that this amount stays invested for at least 3 month. Lendy lists bidge loans secured by commercial property. The interest rates are typically in the range of 7% to 12% and the loan duration is typically 3 to 12 months. Currently a lot of loans are offered on Lendy’s secondary market, which will allow easy diversification into several loans upon signup.

I have been investing on Lendy for 2.5 years now (when I started it was still called Saving Stream) and I reviewed my Lendy portfolio only last month on the blog.

Lendy is open to international investors. While a UK account is not mandatory, I suggest opening a UK bank account online via Transferwise – this will make things easier, if multiple UK marketplaces are used (my article on Transferwise Borderless account).

To get the cashback, just register at Lendy via this link and start investing.

See more p2p lending cashback offers and subscribe to be notified when new cashback offers are listed.

UK App Pariti Sells Zopa Loans

UK app Pariti has integrated loan offers by p2p lending marketplace Zopa into its app allowing users to check whether they could get a better rate for their debt. User can apply for a debt consolidation loan directly from the app. Pariti is using Zopa’s API to access data for the offers.

The Pariti app, which claims 70,000 users, connects to a user’s existing bank accounts, analyses their spending history, and helps them set a target for improvement.

The Zopa integration enables Pariti users to discover if they could be paying less for their debt without affecting their credit score, and to apply directly for a consolidation loan through the Pariti app.

“UK consumers are getting ripped off by credit card companies”, Pariti founder Matt Ford comments. “Introductory offers, confusing fees, and unsuitable products have meant that people are paying far too much to borrow, and are getting stuck in high-cost debt. The product integration with Zopa allows us to proactively help reduce their cost of borrowing and pay off debt faster.”.

Zopa’s CEO, Jaidev Janardana, says: “The API is already being used in online retail, and the implementation of our Pariti partnership marks its first use in a fully integrated, in-app application process. He added: “Our own research shows that many consumers could save money by swapping out expensive credit card debt for a lower-priced Zopa loan, and by working with Pariti we are able to offer this service to even more consumers.”

Friday Fun: Bondora’s Personalized Investment Video

Just before the weekend Bondora sent me an email with a personalized investment overview video (click here to see mine; I was not able to embed it directly here in the blog). The video page encourages sharing via social media (Google, Linkedin, Facebook, Twitter), so obviously an aim is to aid in investor marketing. In future I might need to spend less effort on my personal portfolio reviews and post the video instead (just kidding). The highlighted return figure is higher than my own calculations, but I did achieve a high return on Bondora over the past years.

Have you seen other attempts on viral marketing via investors by p2p lending marketplaces? Let me know in the comments, please.

EDIT: Succeeded in embedding the video now:

Marketplaces Step Up Incentives for Investors

Currently there is an increase of promotions by p2p lending marketplaces in order to acquire and activate retail investors. Cashback offers are more frequent and Funding Circle is giving away iPads to investors that will invest at least 20,000 GBP during the Funding Circle spring promotion. Investors welcome these added benefits, but for marketplaces it is a fine line to walk. They want to grow originations, but risk that investors will expect getting extras and might hold back further investments until the next offer is made.

Funding Circle Spring Promotion
(Image source: Funding Circle)

Google Advertising Lending Club Loans

I have written about the partnership between Google and Lending Club earlier. The image below shows an actual advertising message Google is sending to its Adwords customers. Note that a special loan is offered, not a standard Lending Club loan. This partnership is a great match for both Google and Lending Club. Google can enable its customers to get access to the funds they need to grow their business and potentially spend more on advertising services supplied by Google. Lending Club can target selected businesses, which were prescreened based on the data Google has via the Adwords customer relationship.

google-lendingclub
Image source: Business2community.com

 

Rebuildingsociety offers one Business the First 25K Interest Free

Rebuilding Society LogoUK p2p lending marketplace Rebuildingsociety currently offers a promotion where one business will receive 25,000 GBP of their loan interest free. Loan applications received until 31 August 2015 will enter into the promotion.

Daniel Rajkumar, CEO of Rebuildingsociety.com, said: ‘Companies seeking loans now have peer-to-peer platforms as a mainstream alternative to the banks and I’m delighted to be giving a 25,000 GBP interest free loan to a business. Businesses seeking loan finance can approach us either through commercial finance brokers or directly and our platform will typically enable viable applications to get finance within 4 weeks.’

Lending Club Becomes Exclusive Partner for Financing on Homeadvisor Site

Lending ClubLending Club and HomeAdvisor signed a multi-year marketing deal, that will make Lending Club the exclusive partner providing access to loans for consumers seeking home improvement project financing through the HomeAdvisor website. HomeAdvisor is an online home improvement marketplace where homeowners can connect with pre-screened local home repair and improvement professionals. Continue reading