Review of Mintos Peer to Peer Lending After One Month of Investing

End of the February 2017, marked one full month since I've been investing to Mintos peer to peer lending platform. In this article I'll share some of my findings.

The idea to invest in Mintos Marketplace first arise at the start of 2016, when I was looking for a passive investment opportunities in Georgia (country). Back in these days a newly built platform popped up on my radar, see: Invest in Georgia - Peer-to-Peer (P2P) lending - Mintos.com

Now I was slow on actually starting to invest there for about 8 months, when finally after the New Year, I made a resolution to save million dollars until I will turn 60, see: Road To Million Dollars in Saving Account, my goal for 2017 is to invest about $8,561 during several batches, and different investment portfolios, with peer to peer being just a part of the broader portfolio.

In January 2017 I deposited first amount on Mintos. See: My Start at Investing on Mintos Peer to Peer Lending Platform: Depositing Funds

As I'm located in Georgia, while Mintos Marketplace default EUR bank account is located in Latvia, I was offered to deposit funds in GEL currency to Paysera at local Georgian bank (Liberty) which then is deposited to Mintos Marketplace. In January Mintos platform introduced - currency exchange, at start for free, then it increased to 1% fee and as on March 1st even to 3.5% for EUR/GEL or GEL/EUR currency exchange. 

In total I've deposited GEL 3300 (EUR 1238 / USD 1305) in three batches - at the end of January, at the start of February and in the middle of February. 

My investment strategy

I invest in loans only with buy back guarantee, which means, at least theoretically, that in case if loans go past due, loan originator would buy back bad loans, helping investors to avoid losing money. I tend to invest in short (30 day) loans in Georgia.

In February I had following currency portfolio: 579.53 EUR and 1,665 GEL, if exchanged forth and back, that would mean I have split in half my initial GEL 3300 deposit. In currency exchange fees I've paid GEL 3.65, which equals to about EUR 1.41.

Investments in Georgian lari

Most of the loans in Georgian lari have been late

Investments in GEL

Investments in GEL (as on March 1st, 2017)

Although I bought first short payday loans already at the end of January, I didn't received a single payment in February. Now speaking about investments in GEL currency, there were two loan originators issuing loans in GEL - Creamfinance and Lendo. I invested GEL 1300 in loans issued by Creamfinance - and all of them were late. 

Seems some shift have happened on platform, as Creamfinance stopped issuing new short day loans in GEL currency, instead Lendo pushed a massive amount of GEL loans, offering high 17% annual return. 

I don't tend to invest more than 2,000 GEL as I wouldn't call lari a strong currency, see: My Savings Report January 2015 - GEL Loses It's Value Against USD For 14% Since September

Now, as I told - 0 earnings from lari in February, seems I will need to wait until April (earliest) to see how buy back is actually working. With delayed interest rates it still should be profitable. 

Investments in EUR

Before investing both in EUR and GEL I made some calculations with what to expect during February. I was looking for about GEL 16.2 and EUR 4.5. At the end of the month I got flat 0 in GEL and humble 0.82 EUR. Not at all what I was looking for. 

Investments in EUR (as on March 1st, 2017)

Investments in EUR (as on March 1st, 2017)

In mid February a major push happened with Georgian loans, Creamfinance halted short pay day loans in GEL, while Lendo exchanged most of it's loans from EUR to GEL, pushing investors to exchange EUR to GEL, though offering a really tempting 17% annual return. Short day loans from Georgian in EUR currency just disappeared. I was left with no other option as to look on other "markets" beyond Georgia and extended my limit from 30 day loans to 3, 6 and even 12 month loans. Yes, the yield decreased as well from some 11.2% to 9.5% for Banknote pawnbroking loans and 8% for Mogo car loans.

The Bottom Line: 

In my first full month on Mintos Marketplace I made 0.82 EUR in interest, and paid EUR 1.41 for currency exchange. My net profit = EUR - 0.59. Now I'm still looking on Mintos positively, as I believe all late loans should be recovered using buyback option from loan originators. Also I believe 1 month is just too short time of period to get maximum out of it, rather than to get some understanding how platform is actually working.

I'm looking to deposit some additional USD 1,000 in coming months ,of course, I will need to exchange it first to GEL, then transfer to Paysera, and then exchange again on Mintos marketplace some chunk of money to EUR, as I find it a good way to minimize currency risk with investments been spread in different currencies. 

I hope to come out with more optimistic review after 3 months of investing on Mintos Marketplace.

About Reinis Fischer

Reinis Fischer is a Drupal Developer who works and lives in Tbilisi. A programmer by day and a writer by night. Or Vice Verse. Covers topics on Travel, Restaurant Reviews, Finances, Blogging e.t.c. Loves DIY and recently is excelling as a main constructor in his latest project - home remodeling.
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