Varks – Overview

Varks offers short term loans on Mintos. You can get up to 14% interest rate on EUR loans with buyback guarantee. This is on the top of what is currently available on Mintos. Varks offers currently only short-term loans (< 3 months). All loans are provided in Armenia.

Loans offered by Varks
Loans offered by Varks

You cannot get much information from the information available on Mintos. While rating is currently B, the company has only two years of history. The key people have relevant experience, that is the case for CEO, CFO, and COO. If you look at all the other people working at Varks on LinkedIn, you can see that the company has somewhat relevant structure. I am somewhat surprised how few people are there with focus on data analysis and credit risk management. Maybe, the short-term loan business in Armenia is just about charging extremely high APR and live with high credit losses.

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Interest Calculation – Varks

For each loan Mintos will show the interest rate that is applied on the loan amount. Let’s take this loan as an example:

  • Loan amount: EUR 310.63
  • Interest rate: 14% (p.a.)
  • Initial term: 14d. (days)

In the payment schedule we can see that payment total should be 312.32 EUR, consisting of 310.63 EUR principal and 1.69 EUR interest. So how we can calculate the interest rate? It is quite simple:

Interest (EUR) = Loan amount * Interest Rate * (Initial Term / 360)

Therefore we get: 1.69 = 310.63 * 0.14 * (14 / 360)

Why there is 360? As it looks like, Varks (and actually most loan originators on Mintos) is using Actual/360 method to calculate interest. Because of this we assume that each year has exactly 360 days and the interest amount is calculated based on real duration.

Let us know if the calculation is wrong or not clear.

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Mintos Overview

Mintos is the largest P2P platform where EU citizens can invest. As of 1/2019 there are 264,532 loans available on the primary market and 198,290 loans on the secondary market.

Vast majority of loans if offered in EUR. Unless you have some savings in different currencies or know how to deal with FX risks I would recommend to invest into EUR loans only. Your strategy will be easier to maintain, monitor, and your portfolio will be very likely better diversified.

CurrencyLoansFor InvestmentAvg IR
EUR2358344216559411.7
RUB1801012977043017.9
GEL5330168251315.9
KZT282735064279417
PLN57944538110.9
GBP4172737989.2
DKK497483912
SEK361752978.7
MXN237722116

In 2018, investors put 1.5BN EUR in investments on Mintos marketplace:

Mintos - loans funded and total investmens.
Loans funded on Mintos and total Investments. Source: Mintos

Number of investors on Mintos is growing fast as well. On average, more than 5,000 new investors joined every month over last year:

Mintos – new users per month.