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As a follow-up to my Mintos review, here are several realistic steps that I think Mintos can and should take in the near future, which would significantly improve my opinion on it.
1. Force all loan originators to publish quarterly financial statements, to allow current insight into their financials.
2. Add “vintage statistics” of past loans, like they said they would do a long time ago. This will give investors a better understanding of historic loan performance. Ideally, statistics should also reflect debt collection for defaulted loans, to help assess originator financials.
3. Either forbid originators from buying back loans with no reason, or make them pay a small fee to investors for early buybacks. Investing in loans shouldn’t involve so much supply-and-demand speculation.
4. Disable the option to sell loans on the secondary market at a premium – again, reducing speculation.
5. Last but not least, this isn’t a technical step but an ongoing crucial wish: Add a few more large originators.
Currently, many of the large originators are huge disappointments: Some of them barely publish any loans, others have horrible loan statistics, and most of them offer such low interest rates that it makes more sense to invest anywhere else.
Diversifying among many small originators isn’t enough, investors want a stable “base”. One Mogo is worth ten Monegos.
If anyone from Mintos is reading this, I really hope they take at least some of these advice. Let me know what you think!
Legal notice: This post is not meant as investment counselling! I’m just a fellow investor sharing his personal experience and thoughts.