Is MYC4 moving away from the original idea of a bunch of small, private investors and towards bigger institutional investors? Is the system too technical for ‘ordinary people’ to comprehend? And are currency fluctuations messing up everything? These are some of the thoughts Peter Schmidt, investor since 2007, would like to share his opinion on.
– First of all, I believe the MYC4-concept is fair. It’s generally a contribution to Africa. I like it personally, because it’s more than just giving away your money to a charity. Everyone can join. It’s smart. It’s a possibility for African entrepreneurs to apply for a loan on reasonable conditions. Also, trade generally creates better relations and makes us more connected to each other across borders.
– The best thing about MYC4 is the direct link between investor and borrower, I’ve not come upon that anywhere else. I think it’s a shame though that this connection isn’t always being exercised. For instance if a big loan defaults, I often miss some more communication from the provider, specifically as to why the loan defaulted. That could be practised a lot better I think.
– An aspect about MYC4 that I think could be better as well, is that many of the technical features on the MYC4-platform are difficult to understand if you’re a ‘simple investor’, one who does not necessarily have a great knowledge of finance and economics. The instalment plan for instance, and the financial terminology such as ‘awaiting feedback’, what does that mean? Sometimes less is more. Too many details often takes the focus away from what’s essential.
I can only agree with Peter on that observation, though emphasizing that there is a fine line between information-density and transparency – one of MYC4’s key priorities. The amount of information might seem confusing to some, but at the same time it’s essential to others.
– The original idea about MYC4 being a platform where a lot of private investors throw in a small amount seems to have difficulty gaining a foothold. In the start I thought I should just tell about the concept to ten of my friends, let them tell about it to ten of their friends, and so on, and the viral marketing would be all that was needed to find capital. But now I believe more in the bigger investors. For it to work with a lot of small-scale investors I think MYC4 should be established as a concept where you at least get your money back, and it should be consolidated according to currency loss.
Currency risk remains on investors for now, but at least our intense work on risk share agreements has lowered the investors’ risk.