Titus, our Credit Operations Manager, is in the process of carrying out spot checks on all of our partners in East Africa. He has been supported by Githa in Ghana. We expect all the spot checks to be completed by the end of the year.
The purpose of the spot checks is to validate that the information on the website about the businesses and loans is correct. The spot check is also a review the partner’s organization and processes to ensure they have the capacity to successfully manage the portfolio.
During the spot check we select a sample of the loans and check that:
- the client files including the loan agreement and security documents are complete and match what is on the MYC4 site
- the client files are in line with the partner’s stated policies and procedures, for example the loans have been approved by the partner’s credit committee
- the repayments received by the partner match the repayments reported on the MYC4 system
- there is a good explanation for loans that are not paying according to schedule
We also select a sample of the borrowers to visit, where we check that:
- the borrower exists and the information about the borrower on the MYC4 site is correct
- the loan was used for the purposes stated in the application
- the borrower is aware of MYC4
Finally, we evaluate the overall capacity of the Partner including organization and staff as well as policies and procedures. Based on this we recommend specific changes and capacity development needs. We have some grant funding available to support the partner with training or consulting where we identify needs.
Each spot check results in a series of recommendations to the providers as well as an overall rating. The rating of the spot check will be visible to the investors on the risk score.