Another quarter has gone by so here is an update on MYC4’s Portfolio Performance.
The positive trend from the first half of the year continued in the third quarter of 2012: first of all, more than 950,000 euro was disbursed this quarter, thereby surpassing last quarter’s high volume of 800,000 euro by a significant margin; secondly, the net return on loans disbursed after Q2 2009 by the current providers* improved to 1.9 % after currency (up from 1.2 % in Q2 and -0.1% in Q1). Investors’ net result before currency also improved from 3.6% in Q2 to 3.9% in Q3; thirdly, the performance of the portfolio disbursed in the last three years by the current providers continues to be strong – around 73 % has so far been fully repaid, net defaults are kept below 2 %, and just 1 % is currently being repaid late (by more than 30 days).
The Portfolio Performance Graph above shows the performance of loans disbursed since 2010 divided by quarter of disbursement. The colour blue shows funds that have already been repaid, green shows amounts that are being repaid on time, yellow indicates the balances on loans that are currently more than 30 days late, while red shows the net defaulted principal (i.e defaulted principal less recoveries).
With regards to the effect of currency gains and losses, the picture has not changed a lot over the last three months: there have been significant losses on loans disbursed in 2010 and in the first quarter of 2011, the investors then experienced large gains on loans disbursed in the second half of 2011, and so far in 2012 the currency effects have been minimal (with the exception of Ghana).
The Profit & Loss graph above shows the current result on loans disbursed since 2010 divided by quarter of disbursement. The colour green shows the earned interest, the red indicates the net defaults (i.e. defaulted principal less recoveries), and the purple shows the net realised currency gains or losses.
On the less positive side, 110 loans of close to 220,000 euro cancelled due to lack of liquidity this quarter. The demand for loans on the platform was thus higher than the supply of capital for the third quarter in a row. The outstanding loan portfolio grew despite the liquidity constraints and we are now very close to reaching 2 million euro in outstanding loan balance (OLB) – see development in the graph below.
The portfolio is largely concentrated in Uganda (50 %), but Kenya is growing (now at 30 %), and increased activity from Tujijenge Tanzania this quarter has likewise helped growing Tanzania’s share (12 %). The portfolio at risk above 30 days (PAR30) deteriorated slightly this quarter to close at 4.7 %, yet it was still below the 5 % target (industry best practice).
Other notable highlights from the third quarter includes SISDO joining as a new provider, a new balance sheet for investors, and MYC4 reaching loan number 10,000. To read previous updates on the portfolio performance, including the historical results, follow one of these links: Q2 2012, Q1 2012, Q4 2011, Q3 2011, Q2 2011, Q1 2011, 2010.
* Current Providers: GrowthAfrica, Gatsby Microfinance Ltd, Micro Africa Ltd, Premier Resource Consulting, Tujijenge Tanzania, Fusion Capital Ltd, Makao Mashinani Ltd, Tujijenge Uganda, BELITA, KEEF, Yehu Microfinance Trust, and SISDO.