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)

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6 thoughts on “New product: Mintos Invest and Access – What it is and My Opinion

  1. I find it time consuming to keep the autoinvest settings correctly tweaked such that I am invested in better loans, whilst avoiding cash drag.

    I can imagine for a €100 000 portfolio the effort might be worthwhile, but for a €10 000 portfolio 2% lost interest amounts to €4 a week. How much time do you spend per week on Mintos?

    • Too much, obviously 🙂
      But then I have a professional interest in what is happening.
      Seriously though:
      P2P Lending is a high risk investment and I woould never compare that to having money in instant access acounts.
      But that said, I remember several years ago when interest rates on instant access acounts were higher people were “hopping” instant access accounts (that is opening new ones and moving money) because the difference in interest rates was maybe 0.4% more per year. and here the difference is much bigger and it is not that much time you need to spend.

  2. Positiv ist das man die Zinsen bekommt für welche die Kredite auf den Markt kommen.
    Nicht wie bei Bondora 6,75%.

  3. It seems to me like a way to sell loans that are either low on interest rates or from low rated lenders (C+, C, C-).
    As this “Invest and Access” will invest BEFORE Auto Invest, it may gobble up all/most high interest rates loans (to balance out the low interest rates ones), leaving all the average ones for the AutoInvest.
    Not a popular choice for investor that like to choose themselves.

  4. Very bad development in my opinion. What would prevent a loan originator to list loans at 8% while normally they would be at 12% because of the risk? The only criteria are “6 month on Mintos minimum + buyback guarantee” and the more loans are listed, the more they get bought automatically. So basically if many bad loans with low coupons are listed, they will be bought automatically in higher proportion vs other loans….this makes no sense to me…
    Besides, next time there is a credit crunch, people will all want their money at the same time. Nobody will get anything, and people will get stuck with loans with long maturities while they thought they would have access instantly to their money: “You should be able to access your money anytime under normal market conditions.” It’s what happens under “non-normal conditions” that really matters. This product is a recipe for disaster.

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