Investor Walter Claerhout has been using the MYC4-platform thoroughly for three years. When we asked the kind man for a personal interview, he didn’t hesitate as to share his thoughts and knowledge on the blog.
Why do you invest on MYC4 – what’s the first thing that comes to mind?
– I believe supporting small business can be much more effective in fighting poverty and creating sustainable development than injecting more aid. Small businesses have the potential to generate great efficiency gains in Africa while also boosting local employment considerably.
What’s the best and worst thing about MYC4?
– The thing I like best is the direct links that are created between individuals all over the world. Ten years ago, it would have seemed like science fiction if someone had told you that you can directly lend money through the internet to an African entrepreneur.
– The worst thing to me would actually be the name, because it has an unfortunate connotation in Belgium, where I’m from originally. ‘My C4’ refers to the document you receive from a company when you are fired… (who knew!)
If you should present MYC4 to somebody who had never heard about us before, what would you emphasize?
– I would emphasize that great attention is paid to the ability to repay and that one is putting one’s savings to better use than putting them on a savings account because banks don’t serve this market segment and with current low interest rates across the developed world, the return will very likely be better than what you get on a savings account, without putting all eggs in one basket, since you can diversify your loan portfolio by country, by provider, by loan size, by business type, etc…
If you could tell everyone about one aspect in relation to MYC4, critical or positive, what would you tell about?
– Don’t leave your money idle on your account and make bids that are likely to be activated! Bidding at 50 % on a loan that needs an average of 12 % is simply equivalent to leaving your money idle on your account. It’s a waste of time.
What do you consider as competitors/alternatives to MYC4?
– Kiva is probably the most direct competitor of MYC4, but I have never used the platform before. It seems less business-oriented to me. Other alternatives would include donating money to about any NGO active in Africa, but I’m not always convinced that these NGOs actually make a difference. I think African entrepreneurs probably know best what they need money for, how to invest it as efficiently as possible, and how to improve their living standards through such investments. Loans through MYC4 give them full responsibility and accountability, which probably leads to the best results.
– NGOs often seem inefficient, with many resources going to operational costs, and often also ineffective, as they sometimes advocate certain solutions without thoroughly understanding the needs and daily reality of the people they are trying to help. Finally, aid always has had and always will have a potentially humiliating aspect and may create dependency rather empowerment.
What do you think MYC4 will look like in the future?
– I think MYC4 has the potential to evolve into a global direct lending facility from anybody to anybody anywhere in the world. Of course, the current focus is on Africa, but the platform’s principles could equally be used for lending transactions between any individual and any business anywhere in the world, as long as a parallel ‘provider structure’ exists that can do the due diligence.
– I think the platform also has the potential to move into other areas beside business loans, namely equity stakes, personal investment loans and student loans.
I hope we can live up to those expectations in the future. Thank you Walter.
If anyone should be interested, I plan on doing more ‘investor testimonials’ , so if you want people to hear your story too, please get in touch with me at firstname.lastname@example.org – more financial-oriented investors are also much welcome.