The beginning of a new year is often a good time to hit the pause button for a little while, and on the one hand evaluate the year that just went, and, on the other, look ahead at the year to come. So why not do exactly that?
A year ago, we listed three key challenges for 2011: funding, profitability, and risk (for the full blog post, see 2011 – Challenges and Opportunities). As any active MYC4 investor knows, we would clearly be fooling ourselves to say that we managed to fully solve those challenges: despite significant efforts and promising leads, no additional funding came in during the year; MYC4 is yet to reach break even; and currency risk hit investors particularly hard last year.
What we can say with full confidence though is that important progress was made. Similar to last year, funding for the rest of 2012, with the current staffing and at the current cost level, is in place which means that the going concern of the company is not an issue. With the reduced costs and slightly increased income, MYC4 is for the first time in a position where break even is in sight, albeit still distantly. Finally, the results of the improved risk management procedures and hiring of experienced staff in Kenya have started to show, e.g. in reduced loan defaults, better quality loan portfolio, implementation of risk sharing agreements with all providers, better managed partner exits, half-yearly spot checks, and annual reviews. These three challenges will remain at the core of our attention in 2012.
A key opportunity for 2012 is portfolio growth. We have spent the last 1-2 years on improving the MYC4 business model, our organisational capacity and procedures, as well as our local partner network, meaning that our focus has been on quality rather than growth. We feel that we are now ready to start growing again, and we are experiencing a pull from MFIs that are interested in joining the MYC4 platform. Rest assured, we will not forget our (tough) lessons learned: quality must always remain at the centre of attention, and we strive for controlled growth with good quality loan providers.
To grow the portfolio, we need more capital on the platform. We see great opportunities in attracting larger investors to the platform again, while of course continuing to make MYC4 an interesting vehicle for private investors as well as other sources of funding that can be channeled through the platform. To do so, we see value in e.g. improving the investor reporting tools and also in taking another close look at social impact.
We are excited to get going and we hope that you will all join us in the next phase of the MYC4 journey.
good to see myc4 is going strength to strength..
one report i would love to see tho is the ability to filter repayments by an individual loan.. so that the total repaid against the investment can be easily worked out…
Another thing to think about is how to adequately respond to investors who bring an error on the platform to your attention. Better client/customer service along international standards is appropriate for an international organization, Danish standards of service just don’t cut it outside of Denmark (or even in Denmark, for that matter).
Hi,
I look forward to follow the growth of MYC4 in 2012.
My suggestion is more to the providers … since I would like to see more investment opportunities (if any at all) within energy, environment and sustainability
Regards
Claus
Also to the providers: I would like to see a less formulaic presentation of the loan requests – i.e a bit more substantiation of what the loan is for and how this will increase productivity/sales etc. The standard 12% loan is also a little “boring” surely some adjustment would be suitable for risk and currency fluctuation to show some interest in competitiveness.
Regarding Capital on the platform i would like to draw your attention to some of the investors we already have.
Why not contact the bigger ones like Halberg A/S, Løven ejendomme, ST Group and Tim Frank Andersen and ask them to support bigger loans? For some reason they all prefer small loans and big bids. The small loans are normally easily funded and the money these investors offer would be much more helpful on the big loans.
Especially Halberg A/S is bad medicine as their auto bid is huge and at 15%, and the small borrowers in Africa can only offer 12%.
Best regards
Mogens
I forgot to mention Loop House Holding and Stevns Chartering, sorry!
Mogens
[…] our Providers made a real effort throughout the year and ended with a PAR of 8.81% . We will continue our focus on risk in 2012. Rate this: Share this:FacebookShareTwitterEmailMoreStumbleUponDiggRedditPrintLike this:LikeBe the […]
[…] growth is fully in line with our strategy for 2012 – described in more detail in the post 2012 – Challenges and Opportunities – and we aim to grow the volume further in the second quarter. To do so, we need more money […]
[…] in January, we set out some targets for the year ahead. We […]