Mintos welcomes the first loan originator to offer investment opportunities from Russia on the marketplace – EcoFinance. The lender offers investments in online unsecured personal loans issued in Russia under its CreditPlus brand. EcoFinance loans on the Mintos marketplace initially will be listed in euro (EUR).
“We welcome our first loan originator to offer short-term loans from Russia on Mintos. EcoFinance is a great addition to our marketplace, which increases diversity and brings new opportunities to our investors,” says Mintos CEO Martins Sulte.
Established in 2015, EcoFinance has become one of the leading consumer lenders for subprime and underbanked clients in Russia. The company is run by seasoned banking executives with vast international experience in finance and IT technologies. EcoFinance has over 1.6 million registered client accounts. As of October 2017, more than EUR 16 million in loans were funded by EcoFinance. The company has a share capital of around EUR 1 million.
Russia-issued EcoFinance loans on the Mintos marketplace will range from EUR 15 to 440, with a repayment period of up to 30 days. The expected net annual return for investors will reach 10-11%.
“We are excited to be the first loan originator from Russia to join the Mintos marketplace. Our new strategic partnership with Mintos will allow us to grow faster, and broaden and diversify our funding sources. We challenge ourselves to provide the highest quality service to all our clients, both borrowers and investors,” says Ecofinance CEO Leonid Dulenkov.
EcoFinance puts a strong emphasis on responsible lending. The company has its own algorithms to automate the process of assessing the creditworthiness of clients. Their online service allows borrowers to send loan applications via SMS or website, and funds can be accessed after two minutes. EcoFinance holds a full general microfinance company license provided by the Central Bank of Russia.
Typical EcoFinance borrowers are between 28 and 45 years old. Their average salary is around EUR 445 per month. They borrow money to cover gaps between paychecks to purchase medicine, pay for repairs on their apartment or vehicle, buy clothes or for other urgent needs. They usually repay the loan at the end of the period in one instalment.
Investment structure
Taking into consideration legal requirements and investors’ interests, investors will be able to obtain exposure to EcoFinance loans by investing in loans issued by Mintos OU to Mintos Finance SIA, both Mintos Group companies.
Repayment of each loan issued by Mintos OU to Mintos Finance SIA will be pegged to repayment of a respective loan issued by EcoFinance to its borrower. Mintos OU loans will be secured by a pledge on claims arising from Mintos Finance collateralized loans issued to EcoFinance.
Mintos Finance will provide funding to EcoFinance up to 90% of the principal of a respective loan EcoFinance has issued to its borrower. Accordingly, EcoFinance will keep 10% skin in the game. EcoFinance will repay the loan to Mintos Finance in lockstep with repayment of the respective loan EcoFinance has issued to its borrower.
Should the borrower’s loan become 60 days delinquent, EcoFinance will repay Mintos Finance the respective part of the loan received from Mintos Finance in full, together with accrued interest. Mintos Finance will then repay the related Mintos Finance-Mintos OU loan to Mintos OU in full and with accrued interest, and Mintos OU will buyback the claims on this loan from investors.
