As most MYC4 investors know, you can bid as high as 50% interest on a loan. But how many bids at 50%, 40% or even 30% interest actually end up funding a loan rather than being outbid by others?
Since the very beginning, there have been a total of more than 522,000 successful bids* on MYC4 amounting to over €18,240,000. Of these only two bids have realised an interest of 50%! One bid of €10 on Joel Basirika’s loan and one bid of €50 on Lorines Mirembe’s loan – both loans disbursed in 2007. Every other bid at 50% interest has been outbid.
For an interest of 40% or above only 18 bids have realised this, amounting to €700 or just 0.004% of the total amount disbursed. Not very likely either. For 30% interest or above the figure is still minor: 242 bids amounting to €11,000 (0.06% of total), and for 25% interest or above still only 2,306 bids amounting to €84,000 (0.46% of total). Even for bids at 20% interest or above the figure is still low: 16,000 bids amounting to €935,000 which is still only 5.1% of the total amount disbursed.
The chance of realising a bid with a high interest rate has therefore – as you can see – been quite limited.
Low and middle interest bids
At the other end, there have been nearly 2,000 bids at 0% interest amounting to €32,000 (0.2% of total) and for an interest at 5% or below the figure is 20,200 bids amounting to €511,000 (2.8% of total).
As you can tell from this, the vast majority of bids are somewhere in the middle. For instance, 20% of the amount funded on MYC4 is therefore in the 12-13% bid interest interval and 77% of the amount funded is in the interval of 10-17% bid interest (see the graph above for more details).
So all in all, if you keep bidding a high interest your bids will most likely be outbid by others. As shown in the data above, the historical figures clearly indicate that bid interests around the wanted maximum interests of the loan have been the most likely to be successful.
*A bid being successful means that it has not been outbid or otherwise cancelled; it ended up successfully funding a loan which is either currently repaying or has been completely repaid or defaulted.