The Mintos EUR 20,000 Compensation Scheme, Explained
The scheme covers eligible claims against Mintos as a firm, not borrower defaults on loans. Here is what you actually get, when, and why the distinction matters.
Critical clarification. The EUR 20,000 compensation scheme covers eligible claims against Mintos the firm (e.g. operational failure, mismanagement of client assets). It does not cover defaults by the underlying borrowers whose loans you finance. This is the most common misunderstanding about Mintos investor protection.
What the Compensation Scheme Actually Covers
Mintos holds a MiFID II investment firm licence from Latvijas Banka, the central bank of Latvia and the country's financial regulator. Under Latvian and EU law, MiFID II firms are required to participate in an investor compensation scheme that protects retail clients if the firm itself fails.
The scheme pays up to EUR 20,000 per investor for eligible claims. An eligible claim typically arises when Mintos the firm becomes insolvent or commits fraud, and you held client money or financial instruments with Mintos that the firm cannot return due to its own operational failure. The payout covers your loss up to the ceiling, not the full invested amount if it exceeded EUR 20,000.
This protection is not a deposit insurance scheme like the EUR 100,000 bank deposit guarantee. It covers firm-level failure, not commercial credit risk from the loans you chose to finance on the platform.
What the Scheme Does Not Cover
The compensation scheme does not cover:
- Borrower defaults. If a consumer in Albania stops repaying their loan, or a business borrower in Georgia goes bankrupt, that is a commercial credit loss. The compensation scheme is silent on this scenario - it only addresses firm failure.
- Originator defaults. When a lending company (originator) providing loans to Mintos defaults, investors holding those loans face a credit loss. The scheme does not reimburse you for this. Mintos restructured into a Notes model in 2022 specifically to isolate such risks, but the compensation fund itself still does not cover originator-level credit events.
- Market value fluctuations. If you sell a Note on the secondary market at a discount, or if the declared net asset value of a Note falls due to underlying loan performance, this is a market or credit loss, not a firm claim.
- Voluntary investment decisions gone wrong. You chose which loans or Notes to finance. Poor returns or losses from those choices are not eligible claims unless Mintos the firm mishandled your assets or became insolvent.
The practical upshot: the EUR 20,000 scheme is a firm-insolvency safety net, not a borrower-default insurance policy. Every P2P lending investment carries the risk of partial or total loss of capital from borrower or originator credit risk, and this risk is not covered by the compensation scheme.
How the Scheme Compares to Bank Deposit Insurance
Bank deposits in the EU are protected up to EUR 100,000 per depositor per bank under the Deposit Guarantee Scheme Directive. That scheme covers you if the bank itself fails. Crucially, it applies to deposits (money you place in a bank account expecting the same nominal amount back), not investments.
The Mintos EUR 20,000 scheme is materially different. First, the ceiling is lower. Second, it applies only if Mintos the firm fails and you have an eligible claim - not if the underlying loans default. Third, it is tied to MiFID II investment firm regulation, not deposit-taking regulation, because Mintos is a marketplace platform licensed to arrange transactions in financial instruments (Notes), not a deposit-taking bank.
In practice, if you hold EUR 50,000 in Mintos Notes and a major originator defaults, causing your portfolio value to drop to EUR 35,000, the compensation scheme pays nothing - this is a credit loss, not a firm-level claim. If Mintos itself became insolvent and could not return your EUR 50,000 due to operational failure, the scheme would pay up to EUR 20,000, leaving you to claim the remainder as an unsecured creditor in any insolvency process.
Practical Scenarios Where the Scheme Would Apply
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Mintos becomes insolvent and cannot return client funds
Mintos the firm fails financially, enters liquidation, and you held uninvested cash or Notes with Mintos that the firm cannot return because it mismanaged segregated accounts or committed fraud. You file a claim with the Latvijas Banka-designated payout agent and receive up to EUR 20,000 per investor.
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Regulatory action freezes Mintos assets due to firm-level misconduct
Latvijas Banka suspends Mintos' licence and freezes its accounts following evidence of serious regulatory breach (e.g. client money was not properly segregated). If you cannot access your funds as a result of Mintos' operational failure, you may have an eligible claim.
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Fraudulent activity by Mintos management
Senior management at Mintos misappropriates client assets. The firm collapses. The compensation scheme covers eligible claims against the firm, up to the EUR 20,000 ceiling, if you can demonstrate you held assets with Mintos that were lost due to this fraud.
In every scenario above, the trigger is firm failure, not loan performance. The scheme exists to protect you from Mintos itself, not from the credit risk of the loans Mintos arranges.
Practical Scenarios Where the Scheme Would Not Apply
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An originator defaults and stops funding buybacks
An originator providing loans to Mintos goes bankrupt. You held Notes linked to that originator. The originator's buyback obligation lapses. Your portfolio value drops. This is a credit loss. The compensation scheme does not cover it because Mintos the firm is still operational - only the originator failed.
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You invest in high-risk loans and suffer losses
You allocate your portfolio to loans with 18% interest rates. Many borrowers default. Your returns turn negative. This is a commercial credit risk you accepted when choosing those loans. The scheme is silent on this scenario.
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You sell Notes on the secondary market at a discount
You need liquidity and sell your Notes for 95% of their nominal value on the Mintos secondary market. The 5% discount is a market price, not a firm failure. The scheme does not reimburse market-value losses.
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Mintos changes its fee structure or product offering
Mintos introduces a new fee or discontinues a product. You dislike the change and your returns fall as a result. This is a commercial decision by the platform, not operational failure. The scheme does not apply.
How to File a Claim (If Eligible)
If Mintos the firm fails and you believe you have an eligible claim, the process is managed by Latvijas Banka and a designated payout agent. The regulator will publish instructions on its website detailing how to submit evidence of your holdings and the nature of your claim. You will need account statements, transaction records, and proof that you were a Mintos client at the time of the firm's failure.
The payout agent will assess your claim against the eligibility criteria set out in Latvian law and the MiFID II framework. If approved, you receive up to EUR 20,000. The timeframe for payout varies but is typically within several months of the claim filing window closing. Any amount above EUR 20,000 is treated as an unsecured claim in Mintos' insolvency proceedings, where recovery is uncertain and often takes years.
As of 2026, Mintos remains operational and licensed. There is no active claim process because no triggering event (firm insolvency or fraud) has occurred. This section is provided for completeness, not because such an event is anticipated.
Why the Distinction Matters for Your Investment Decision
The EUR 20,000 compensation scheme is often cited as a reason Mintos is safer than unregulated P2P platforms. This is partially true. The scheme does provide a layer of protection that platforms without MiFID II licences typically lack. However, it does not protect you from the primary risk most investors face: credit losses from borrower or originator defaults.
When evaluating whether Mintos is safe, consider the scheme as a backstop against firm failure, not as loan-default insurance. The real risk management on Mintos comes from diversification across originators, understanding individual originator credit risk, and recognising that past buyback performance does not guarantee future coverage. The restructured Notes model introduced in 2022 provides some additional structural protection by isolating originator risk, but the compensation scheme itself remains narrowly scoped to firm-level claims.
If you are comparing Mintos to a savings account, remember: savings accounts in EU banks are protected up to EUR 100,000 for deposit value, with effectively zero credit risk on the deposit itself. Mintos is an investment platform where your capital is at risk from loan defaults, and the EUR 20,000 scheme covers only firm failure, not that credit risk.
Other Mintos Safety Features (Beyond the Scheme)
Mintos investor protection extends beyond the compensation scheme. The platform holds a MiFID II licence, which requires operational standards, capital adequacy and regular Latvijas Banka supervision. Client funds are held in segregated accounts, meaning they should be separated from Mintos' own operating capital. The secondary market provides liquidity (though not guaranteed at par). Individual originators may offer buyback guarantees, though these are contractual promises dependent on the originator's own solvency.
The Mintos Notes structure, introduced in 2022, aims to clarify investor claims and reduce ambiguity in originator-default scenarios. Each Note is a distinct financial instrument with a defined claim against an originator's loan portfolio. This does not eliminate credit risk, but it does provide a clearer legal framework than the earlier "assignment" model.
None of these features are covered by the EUR 20,000 scheme. They are separate risk-management tools. The scheme is your safety net if Mintos the firm collapses; the other features address day-to-day operational risk and credit risk.
Key takeaway. The EUR 20,000 compensation scheme is Mintos investor protection against firm failure, not loan defaults. Understand this distinction before investing. Every P2P loan carries the risk of partial or total loss of capital, and the scheme does not cover that risk.
Frequently Asked Questions
No. The EUR 20,000 scheme covers eligible claims against Mintos as a firm (e.g. operational failure, mismanagement of client assets), not defaults by the underlying borrowers whose loans you finance. Borrower defaults are a commercial credit risk you accept when investing in P2P loans.
If Mintos the firm fails and you have eligible claims (e.g. you held client money with Mintos and it was mishandled), the Latvijas Banka compensation scheme may pay up to EUR 20,000 per investor. You must file a claim with the designated payout agent following published procedures. Any amount above EUR 20,000 would be an unsecured claim in Mintos' insolvency proceedings.
Eligible claims typically involve operational failure by Mintos (inability to return client funds due to firm insolvency or fraud), not commercial losses on loans. The Latvijas Banka or designated payout agent will assess your claim against the legal criteria. Verify your specific situation with Latvijas Banka or independent legal counsel if you believe you have a claim.
No. Originator defaults are a commercial credit risk. The scheme protects you only if Mintos the firm mismanages or fails to return your assets. For originator risk, check individual buyback guarantees and the Mintos Notes structuring, which aim to clarify claims but do not eliminate credit risk.
Not investment advice. This guide explains the legal scope of the Mintos compensation scheme but does not constitute financial, investment, legal or tax advice. P2P lending carries a risk of partial or total loss of invested capital. Verify all details directly with Mintos and consult a licensed advisor before investing.