So far, 2020 has been a year like no other. We moved quickly to adapt to the new economic climate that came as a result of the COVID-19 pandemic, and continue working closely with the lending companies on our Mintos platform to make sure they do the same.
We’ve seen many lending companies make adjustments to their businesses in order to face their new reality, and while the full effect of this approach is still unfolding, a total of €71 171 977 in net transfers was made to investors in March and April during the economic slowdown.
Net transfers in 2020
Even after a temporary increase in pending payments on Mintos due to the economic downturn, lending companies have forwarded on more in net transfer payments to investors than in previous months (as shown below).
Source: Mintos, May 2020
‘Net transfers’ refers to the difference between the sums of money received for new investments and repayments lending companies forwarded on to investors. The impact of COVID-19 hit global markets hardest around late February–April, which meant fewer new investments. As a result, the lending companies on Mintos have paid out €20 271 330 more than they received in new investments overall, in 2020.
What does this mean for investors?
Seeing the rate of net transfers at current levels indicates that the majority of lending companies have been making transfers to investors on time and in full. As well as ensuring efficiency across everyday operations, many lending companies have adjusted to the situation by reducing their issuance and tightening their criteria for borrowers to qualify for loans.
This data – along with the overall steady investor repayment levels across March and April outlined in the PDF below¹ – can offer some assurance about the resilience of crowdlending during a financial crisis.
¹ Download PDF: repayments to investors (excluding pending payments) in 2020 here.