Mintos Strategy – how to create your strategy

In order to create your own strategy on how to invest in loans on Mintos, you basically have to answer only two questions:

  • What is your investment horizon?
  • What is your risk appetite?

From your answers, the rest will follow. Let’s assume that you can have three choices to answer each of these questions:

  • What is your investment horizon?
    • Short (less than 12 months)
    • Medium (12-24 months)
    • Long (24 months and more)
  • What is your risk appetite?
    • Low – Losing money is not acceptable
    • Medium – I am ok losing some of the money
    • High – I am crazy

In the text below I will assume that rating provided by Mintos for the loan originators is useful and actually correlates with the chance the lender will default. Also, only current EUR loans are being considered, however you can re-apply this to other currency.

Overall strategy

Regardless of the time horizon and risk, consider proper diversification when creating your Mintos strategy.


  • diversifying investments across lenders:
  • given two lenders with the same interest rate and rating, it is much better strategy to split investments between these two equally than investing in one only. Why is that? If everything goes well, your profit is the same. In unfortunate event when one of the lenders is not able to meet the buyback guarantee, your loss is only 50%. With 4 lenders it will be 25%, and so on.
  • diversifying investments across countries: the same as for lenders applies for countries. If you will have 100% of investments tied to single country, you are risking higher loss. Some of the things that could affect lender in every country are:
    • legislation – especially for fin-tech companies this can be wide range of changes from increased requirements on minimum capital, reporting to national banks, caps on interest rates, or outright ban of some lending practices
    • economy – not all of the countries are the same (see this previous article) regarding the risk they are facing
  • diversifying investments for the same lender – I generally not suggest to invest more than the minimum in any single loan. There are three reasons:
    • With lower investment, you will have more loans which allows you to diversify better
    • With more loans invested in, you will learn more. It is not possible to re-create all historical data from what is provided by Mintos. If you built your own history, you will be able to see whether there are any gaps in your investment portfolio.
    • There is variability in what you think you will get and what you get. Despite the fact that Mintos says 10% you can end up earning 9% or 4%. This is largely driven by buyback strategies each lender has and difficult to influence by different strategy. With more loans, the average performance will be however closer to the stated interest rate.

I will add more details on the different strategies in next article.

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