Average returns in Twino and Mintos

If there is one topic that investors get passionate about, then it’s returns. Looking at the current economic climate, then P2P returns are clearly quite good, but the somewhat downwards trend you can see happening is clearly causing dismay among investors.

Way back when, when I started investing in Bondora, it was completely possible to get 20% returns yearly due to the fact that the market was both new (therefor high risk), and pricing was vague at best (due to lack of precise credit models). However, in the recent few years the industry has clearly evolved to be more mature and less inefficient, bringing to investors loans with buy-back guarantees, which at times might have left beginners the impression that there isn’t much inherent risk left anymore when it comes to investing into P2P (which is clearly not the case).

The two favourites of the recent year or so have clearly been the two Latvian portals – Mintos and Twino, which offered large loan volumes with buy-back guarantees. For a while the interest rates were high enough that many people were a bit confused as to why the rates were that high, and were sure that the rates would be dropping in the near future.

It seems that we are somewhat starting to reach the point where returns will not be as high as they were anymore, and this is of course both good and bad – for investors who enjoy higher risks, the reduced returns are of course bothersome, for more conservative investors the lowered level of risk will of course be more appealing.



Twino has already gone through one attempt to reduce the interest rates, which caused significant uproar among investors. They attempted to drop the interest rates to 10%, which caused investors to reduce their investments, which made them increase the rates once more, but they are still not back to the point where they started at (they used to be 12,9% & 14,9%; however now are 10-12% & 13% respectively.)

This means that while it’s still possible to generate >10% returns, then looking at the loan volumes they process the question arises – for how long? Since Twino is closing in on 10 million loans funded per month, then clearly there is enough investor money to go around, meaning when the higher interest loans run out, then the lower interest loans will get funded as well. Once enough get funded regularly, it would be reasonable to expect a drop in the rates.

Interestingly enough, a lot of investors in Twino seems to be super cautious about the longer term loans (24 months), which in my opinion seems a bit unfounded – largely because 1) they are resellable 2) a large amount of them get bought back early, meaning it’s not such a big commitment.



Now, with Mintos, the dynamic for the rates is a bit more complicated since different loan originators balance the interest rates between what they themselves believe to be fair and what the other originators are offering. This so far has caused a sort of a hierarchy to form between the different originators, meaning some loans disappear from the market very quickly (or get marked full by autobidders) while some remain “waiting” on the primary market.

While there have been fluctuations here and there between the interest rates offered, then it’s clear to see that the amount of loans with a buyback guarantee has been slowly but surely decreasing, meaning that investors are forced to do some more in depth analysis to figure out whether or not they should include lower rate buy-back loans or higher rate ordinary loans, which is rather complicated to do due to the lack of public information about the loan books of the originators.

Future of returns

Twino and Mintos do not exist in a vacuum – the amount of investor money available is dependent on the amount of projects listed on alternative sites and the returns offered there. However, if you look at the average returns offered by other portals, then >12% returns will be more and more unlikely as time goes on.

Just looking at the Estonian portals available, then Estateguru historical returns are <11%, for Bondora they have said they wish to hit 10% returns, for Investly the returns are <9%. Higher returns are offered by P2P portals which include more risk or a more complex model (Crowdestate for example inherently has much more risk, Omaraha’s premium for returns makes sense if you consider the fact that they have no proper exit mechanism available and the learning curve is rather steep).

It’s of course difficult to make predictions about the future, and how the markets behave, but I do believe that we are likely to be hitting the downwards slope of returns, which will in the long run bring us closer together to US/UK/Central European returns for P2P portals.

On the one hand this means a bigger faith by investors (investing their money at a lower rate), and a reduced risk rate (due to growth of the whole sector), on the other hand this will signify lower returns, and higher efficiency on the markets, meaning the >20% returns several investors have achieved are likely to be in the past. As someone who does believe that the effort/risk vs returns have been off balance so far, the returns lowering a bit is not an unexpected development.

7 thoughts on “Average returns in Twino and Mintos

  1. Hi.. could you please elaborate a bit on what you said about Omaraha.. and what are your thoughts about the portal in general. Also, do you invest there? Why? How much does that make of your whole portfolio and how much of your p2p portfolio? Thanks if ure willing to share..

    1. Omaraha doesn’t have a secondary market, meaning that exiting is not possible at quick notice at this point. Also, their system works differently (they take 20% off the interest you earn, and you have to figure out which interest rates to set yourself), so it takes a while to get the hang of it. I do invest there, but it takes quite a bit of attention to get consistently great returns. It’s about 20% of my p2p portfolio at the moment.

      1. Thank you for the reply. By ‘quite a bit of attention to get consistently great returns’, you mean you have to adjust the automatic bidder all the time? I’m just starting out there and loans seem to go out quickly enough for me (I don’t have too much money). Maybe I’m still giving it out for too low an interest? Could you please check my settings and comment: http://www96.zippyshare.com/i/XSi5bsYM/162/omaraha%20%282%29.jpg

        What do you think? Should I change anything considering the time being?

        Thank you very much for your time :)

        1. If the money goes out too quickly then probably yes, your interest rates are too low 😉 The rates fluctuate quite a bit depending on day of the week or start/end of the month, which means that yes you should spend quite a bit of time on the tinkering. I mostly give out longer term loans, your interest rates for the 4 year loans are lower than what I use.

  2. If we’re specifically talking about Mintos and Twino, then sure, the risk of “unknown” or newness has gone down.

    However I’d argue that credit risk for investors has actually gone up. Especially when you look at some originators on Mintos where LTV of loans has gone up from 20% over a year ago to 80% on average today.

    Don’t have much data on Twino, but I would be surprised if their growth hasn’t increased the risk level of their portfolio.

    Same with Bondora. While they have finally managed to issue more than €2 mil per month (giving some hope that they won’t run out of funds yet and could reach profitability), almost all of that growth comes from Spanish HR loans.

    Loans that are so risky that I don’t know of any other platform issuing anything close to this loss rate. Essentially junk loans.

    This higher credit risk in turn also translates into higher platform risk for investors in both buyback and non-buyback scenarios.

    In short, I agree that returns have come down, but to me it seems that risks have simultaneously gone up as well.

    Another question is coming down to same rates as US and UK. Our banks don’t have same rates, not even close.

    If the reason is only lack of competition then it’s a welcome change on the whole. Unfortunately I think it’s at least partially dictated by a higher inherent risk as well.

    If the latter is true, then investors putting money to Baltic platforms would be taking more risk to achieve same return and that would not be very sustainable in the long run.

    1. I only have a little bit of money in Viventor (150 eur), so it’s hard to tell. There seems to be enough loan supply though, so overall as a 12% buyback type product, I think it can work just as well as Twino and Mintos. Just a bit of a shorter history and less hype at the moment. As my portfolio grows I’ll start adding a bit more funds there as well, to catch up a bit to others.

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