Another three months have passed, so here is the quarterly update on the performance of the MYC4 portfolio.
Let us start with the good news. Loans disbursed in the last two years by our current providers continue to return more in interest than what is lost in defaults. This portfolio now shows a net return of 3.5 % before currency. It is also positive to note that €547,058 were disbursed in the quarter which is the highest volume of disbursements in two years (all partners included).
Out of the almost €4.2 million disbursed since Q2 2009, 71 % has now been repaid, 24 % is being paid back on time, 3 % is repaying late, and 2 % has defaulted. This is visualised in the graph below which shows the current status for the loans disbursed in each quarter by the active MYC4 partners.
Now to the bad news. MYC4 investors continue to be hit hard by currency losses. This topic has previously been explored here on the blog in the posts As the Shillings Slide and Gatsby Uganda introduces new loan products in response to the sliding shilling. Click on the two links to read more about how the current rough patch of the East African currencies are affecting MYC4 investors, and also how one provider has decided to react to these developments by offering higher returns to investors.
When currency gains/losses are included in the equation, the net return for investors becomes -3.4% on the portfolio disbursed by the current MYC4 partners in the last two years (see graph below). For loans disbursed in 2010, the result will not change much as 89 % of these funds have already been repaid. The 2011 portfolio still has 62 % of the funds outstanding, thus the picture can still change for these loans in the next couple of months depending on the development of the currencies.
The final graph includes the historical perspective by showing the performance of the entire MYC4 portfolio since the beginning. The performance of the 2008/2009 portfolio has been analysed in detail in the previous portfolio performance posts, particularly in the one focusing on 2010.
Finally, as we also reported last quarter, the active partners have all resolved to improve the MYC4 portfolio quality by reducing the Portfolio at Risk (PAR), i.e. the part of the outstanding portfolio that is more than 30 days late, from 15 % to below 5 % in 2011. At the end of Q1, the PAR was reduced to 11 % while Q2 ended with a PAR of 8 %. In Q3, we have witnessed a small increase in the PAR to 12 %. In the last three months of the year, we will strengthen our focus on reducing the PAR to below 5 %.