Crowdlending risks in Europe: default, platform failure and the limits on each
Crowdlending can lose money: Mintos reported a -1.2% net return for 2022. Eight risks, dated European cases and what limits each one.
Updated: 1 October 2026
Crowdlending can lose money. On Mintos, the published net return for 2022 was -1.2%, because losses of 8.2% outweighed a gross return of 7.1% (Mintos historical performance). Risks include borrower default, originator or platform failure, limited exit, concentration, currency moves and tax. EU and UK rules add disclosure and authorisation, and no deposit guarantee covers the loans.
Crowdlending risk map: mechanisms, dated cases and limits
Eight risks of crowdlending appear below with the mechanism behind each, a dated case and what limits the exposure.
| Risk | Mechanism | Dated example | What limits it |
|---|---|---|---|
| Borrower default and delay | The borrower pays late or stops paying, and the investor waits for enforcement or recovers less than the principal | Estateguru: a 750,000 EUR loan issued in June 2021 was classed as defaulted at the end of 2022. The loan ultimately returned principal in March 2025 (Estateguru, 9 April 2026). Lendy (UK): 160 million GBP outstanding. At least 90 million GBP was in default when it entered administration in May 2019 (Alternative Credit Investor, 28 May 2019) | Collateral the platform can enforce; many small loan parts |
| Originator failure | On a marketplace, a partner lender (the originator) issues the loans and, on Notes with a buyback obligation, owes a buyback after a delay | E-Cash, April 2021: after seven days of missed settlement payments Mintos suspended it, with 11,516 investors holding active investments (Alternative Credit Investor, 26 April 2021) | Buyback obligation of the lending company once a loan is more than 60 days late, on Notes that carry one (Mintos risk page). Exposure limits per originator |
| Platform failure | The operator becomes insolvent or stops trading, and collections depend on arrangements made in advance | Envestio and Kuetzal were declared bankrupt in Estonia in June 2020. About 33 million EUR of lender funds were at Envestio (Alternative Credit Investor, 10 June 2020) | EU: authorisation with a business continuity plan (ECSPR art. 12). UK: FCA wind-down plan rules |
| Liquidity | Loans have fixed terms, so an early exit needs a buyer, often at a discount and a fee | Mintos applies a 0.85% fee to every secondary market sale (Mintos help, updated 7 May 2026) | Investing only money that can stay locked until maturity |
| Concentration | Several investments depend on one originator, country or promoter group | Terlat group, January 2017: Wiseed investors put 997,000 EUR into two Terlat programmes. Likewise, Anaxago investors put 1.7 million EUR into four others (Que Choisir, 19 January 2017) | Diversification limits by loan part, originator and country |
| Currency | The loan is in another currency and the exchange rate moves before repayment | ECB reference rate: 90.8791 roubles per euro on 23 February 2022 and 115.4842 on 28 February 2022 (ECB) | Loans in the investor's own currency; on Mintos the originator assumes exchange risk when Note and loan currencies differ |
| No deposit guarantee | The loan is an investment, so deposit schemes do not cover credit losses | FCA consumer page, updated 10 July 2026: loan-based crowdfunding investors "won't have access to the Financial Services Compensation Scheme" (FCA) | Warnings and entry checks: the ECSPR key investment information sheet and the FCA appropriateness assessment |
| Tax | Interest is taxable income, and withholding and rates differ by country | Mintos withholds 5% on Notes and Fractional Bonds interest. The rate applies to private investors resident in the EU or EEA outside Latvia (Mintos help, updated 7 March 2025) | Confirming tax residence details with the platform; the crowdlending taxation guide |
Borrower default and delay: Mintos losses from 2020 to 2024
Losses turned the Mintos net return negative in 2022 and stood at 0.0% in 2023 and 2024. Net return is gross return minus the annualised loss rate, and the loss is the amount lost after recoveries, according to Mintos. Bonuses and fees also stay out of the calculation.
| Year | Gross return | Loss rate | Net return |
|---|---|---|---|
| 2020 | 10.6% | 6.3% | 4.3% |
| 2021 | 9.7% | 3.6% | 6.1% |
| 2022 | 7.1% | 8.2% | -1.2% |
| 2023 | 10.4% | 0.0% | 10.4% |
| 2024 | 9.3% | 0.0% | 9.3% |
Source: Mintos historical performance, read on 1 October 2026.
Per the page notes, 2020 was impacted by Covid-19 and the 2022 loss by the Russian-Ukrainian war. Write-offs on loans of suspended originators rest on recovery estimates, and the data is updated quarterly.
For loss rates feeding into net returns across platforms, see the crowdlending returns guide. Behavioural errors that make losses worse appear in the top 5 mistakes guide.
Worked example: how delay and default cut a 10% gross loan
In this illustrative portfolio, five defaults and ten delays bring a 10% gross return down to 6.19% a year. It uses no platform data. The model assumes 100 loans of 1,000 EUR at 10% gross for 12 months, paid at maturity. A delayed loan pays its original interest and principal six months late. However, a defaulted loan pays no interest and recovers 40% of principal at month 12. Annualised return is total gain divided by capital-years, meaning the money tied up weighted by time.
| Scenario | Loans | Total gain (EUR) | Capital-years (thousand EUR) | Annualised return |
|---|---|---|---|---|
| A | 100 on time | 10,000 | 100 | 10.00% |
| B | 90 on time, 10 delayed six months | 10,000 | 105 | 9.52% |
| C | 95 on time, 5 defaulted | 6,500 | 100 | 6.50% |
| D | 85 on time, 10 delayed, 5 defaulted | 6,500 | 105 | 6.19% |
| E | 90 on time, 10 defaulted | 3,000 | 100 | 3.00% |
Five defaults cost 3.50 points, because each defaulted loan loses 600 EUR of principal and 100 EUR of interest. Ten delays cost 0.48 points. With 40% recovery, a default rate of 14.3% brings the return to zero.
Maclear's terms and conditions (clause 3.9) fill the reserve fund by transferring 2% from each project successfully funded on the platform. Its FAQ of 10 September 2026 calls it the Provision Fund. The fund may be used, to the extent funds are available, to cover investors' losses on interest and/or principal. If a borrower delays payments by more than 3 days, Maclear activates it to cover the outstanding interest.
Platform and originator failures in Europe, 2019 to 2026
Platform and originator failures in Europe since 2019 ended in administration, suspension with partial recovery, orderly closure or court-supervised reorganisation.
- Lendy (UK), May 2019. The platform entered administration on 24 May. The FCA said then that an investigation into the circumstances was ongoing (Alternative Credit Investor).
- E-Cash, 2021. Mintos staff wrote on 10 September 2021 that the recovery rate had been increased to 35%. They added that amounts still shown as in recovery should be considered lost (Mintos community).
- Zopa (UK), closure on 31 January 2022. Zopa announced that Zopa Bank would buy the P2P loan portfolio. The aim was for investors to receive the full value of their invested balances by that date (Zopa). Alternative Credit Investor reported on 31 January 2022 that the retail P2P business closed that day (Alternative Credit Investor).
- Funding Circle UK, March 2022. The retail platform closed after new lending was paused in April 2020. Its UK chief executive said retail investors had on average received 80% of their investments back during that period (Alternative Credit Investor).
- Tudigo (France), August 2026. A court-supervised reorganisation opened on 5 August 2026 at the Bordeaux commercial court. Tudigo's notice of 14 August states that amounts already invested are not directly affected. It adds that reimbursements sit on a segregated Lemonway account and that a hearing on offers was set for 30 September (Tudigo).
Liquidity, concentration and currency in platform rules
Platform rules set the practical limits on exit, and they differ. On Mintos, investors are told to be prepared to hold until maturity. In addition, investments from suspended or defaulted originators cannot trade on its secondary market (Mintos help). PeerBerry's secondary market charges no fee and allows discounts of up to 50%. Yet it cancels an offer unsold after 14 calendar days and permits a sale only 180 days after the investment (PeerBerry help).
Concentration limits come from the platform's own guidance. Diversification principles on Mintos include at least 100 loan parts and no more than 20% with one originator. Further limits are no more than 33% in one country and no more than 50% in any three countries (Mintos diversification).
Currency risk showed up in February 2022. Roubles worth 1,000 EUR on 23 February bought only 787 EUR on 28 February. That is a fall of 21.3% at the ECB reference rates in the table above. In the same week Mintos removed all loans from Russia and Ukraine from its primary market, naming eight originators. Mintos kept the secondary market open until further notice (Alternative Credit Investor, 25 February 2022). Its risk page adds a scenario in which the currency of the underlying loans devalues significantly against the listed currency. As a result, the lending company's ability to transfer amounts due to the investor might be impacted (Mintos risk page).
What ECSPR and FCA rules give crowdlending investors
Under the EU Crowdfunding Regulation (ECSPR, Regulation (EU) 2020/1503), applied since 10 November 2021 (Article 51), EU investors get four protections:
- Authorisation. Platforms need authorisation, and the application must describe a business continuity plan for critical services on existing investments if the provider fails (Article 12). ESMA keeps a public register of providers (Article 14).
- Entry knowledge test and loss simulation. Non-sophisticated investors answer questions on experience and risk understanding, reviewed every two years. A simulation sets ability to bear loss at 10% of net worth, excluding personal and investment property and pension funds, and is reviewed yearly. Investors are not prevented from investing (Article 21).
- Reflection period. An investor can revoke an offer within four calendar days without giving a reason or paying a penalty (Article 22).
- Key investment information sheet. It runs to at most six A4 sides. The sheet carries a disclaimer that competent authorities and ESMA have neither verified nor approved the offer. A warning of partial or entire loss is included too (Article 23).
UK investors fall under the FCA, which regulates loan-based crowdfunding (FCA consumer page). The FCA announced rules on 4 June 2019. They added an appropriateness assessment where no advice is given, stronger wind-down plan requirements and minimum information for investors (FCA press release).
Tax on crowdlending interest: withholding and national rates
Private investors resident in the EU or EEA outside Latvia lose 5% of interest to withholding on Mintos. It is applied the day after they confirm EU/EEA tax details. However, all other investors face 25.5% unless a tax residence certificate lowers it (Mintos help). Home-country tax then applies to the interest at national rates. Germany, for example, applies a 25% flat rate to such capital income (§ 32d EStG). Spain taxes it on a state savings scale of 9.5% to 15% plus a regional scale of 9.5% to 15% for 2025 income. The two scales together give 19% to 30% (AEAT). Credits, filing steps and country rules are covered in the crowdlending taxation guide.
Crowdlending risks FAQ
Is crowdlending covered by a deposit guarantee?
No. Under ECSPR, the key investment information sheet must state that the investment is not covered by deposit guarantee schemes under Directive 2014/49/EU. The sheet must also state that the investment is not covered by investor compensation schemes under Directive 97/9/EC (Article 23). Latvia's investor compensation scheme counts Mintos as a member. But its risk page says the scheme does not protect against borrower default or lending company default (Mintos).
Does the EU crowdfunding regulation cover every crowdlending offer?
No, ECSPR does not apply to crowdfunding services provided to project owners that are consumers. Nor does it apply to offers with a consideration above 5 million EUR calculated over 12 months (Article 1). As a result, the key investment information sheet, entry test and reflection period are not required for those offers.
Can a UK investor put unlimited money into crowdlending?
Not always, because the FCA's June 2019 rules include a limit of 10% of investable assets in peer-to-peer agreements. The limit covers retail customers new to the sector. The rules set an implementation deadline of 9 December 2019 (FCA).
What happens to investments when an EU crowdfunding platform stops operating?
Whoever the business continuity plan names administers existing investments. In the Koregraf case, the platform asked on 22 April 2025 to withdraw its authorisation. Next, the Bordeaux commercial court ordered its liquidation on 20 May 2025. The AMF invited its clients to contact Capsens, designated as winding-up service provider under the plan, to monitor repayment of their investments. Withdrawal took effect on 30 June 2025 (AMF, 8 September 2025).
How much can an EU investor put into one offer before extra confirmation is required?
Above the higher of 1,000 EUR or 5% of net worth per offer, the platform must obtain three items. They are a risk warning acknowledgement, explicit consent and proof of understanding (Article 21). As an illustration, an investor whose net worth is 40,000 EUR on the Article 21 basis has a 5% share of 2,000 EUR. That exceeds 1,000 EUR. Offers above 2,000 EUR therefore trigger the extra steps.