This year we will introduce something slightly new on the blog, namely monthly updates with key information about the MYC4 providers. We will not cover all providers in each update, but rather select the ones where we have some news to share. Considering that this is the first update, however, we have included all the active providers below.
Micro Africa Ltd
Micro Africa Ltd (MAL) currently has a combined outstanding MYC4 loan portfolio of approximately €620,000 in three countries (Kenya, Uganda, and Rwanda) and has now become the biggest provider on the platform in terms of volume. MAL has furthermore the responsibility for the Growth Africa portfolio which has around €600 left in 4 active loans. The efforts to recover on the defaulted Growth Africa portfolio will continue after the active loans have been cleared. It is expected that MAL will further grow its portfolio on MYC4 in the coming months in all three countries of operation.
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Last year, Tujijenge Tanzania grew its outstanding MYC4 portfolio from €75,000 in January to €300,000 in December. Despite a slow start to the year, it is expected that the growth will continue in 2013 and that Tujijenge Tanzania thereby will become one of the largest providers on the platform. This is a positive development considering that Tujijenge Tanzania is a well established institution with a proven track record on and off the platform; and furthermore that the country diversification of the overall MYC4 portfolio will be improved with more volume in Tanzania.
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Yehu Microfinance Trust
Yehu has had a slow but good start on the platform since joining in June last year, and its outstanding MYC4 portfolio is currently close to €60,000 in 174 loans. The average size of Yehu’s loans is around €390 which is the smallest of all active MYC4 providers. It is therefore necessary for Yehu to have a large number of loans in order to build some volume. MYC4 has scheduled a pilot evaluation with Yehu next month where growth projections for this year will be determined. The expectation at this point is that Yehu will begin increasing its volume in the next couple of months, however more information will come once the evaluation has been completed.
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Tujijenge Uganda is one of the smaller providers on – and off – the MYC4 platform. The current outstanding MYC4 portfolio is around €90,000 where it has been more or less steady over the last 12 months. Tujijenge Uganda specialises in group loans in rural areas with a particular focus on women and youth. It was also a Tujijenge Uganda group that inspired the post Disability is not Inability here on the blog back in September. In terms of projections for this year, it is expected that Tujijenge Uganda will continue to upload loans for €15-20,000 per month and thereby maintain the current volume, or alternatively grow its portfolio slightly.
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When KEEF joined the platform in January last year, all growth expectations were quickly exceeded; its outstanding MYC4 loan portfolio reached €350,000 in less than 6 months and KEEF immediately became one of the largest providers on the platform. At the pilot evaluation in April last year, it was agreed that KEEF’s portfolio on MYC4 should remain below €350,000 until further notice to ensure that the institutional capacity could keep up with the portfolio growth. This week, MYC4 is carrying out the annual review at KEEF and we should therefore have more information to share in next month’s provider update.
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The newest provider on the MYC4 platform, SISDO, had a strong finish to 2012 with more than €180,000 disbursed in November and December alone. The current outstanding MYC4 portfolio is around €200,000 which was the maximum target for the pilot phase. MYC4 carried out the pilot evaluation a couple of weeks ago and we are now in the process of agreeing on the best way forward with SISDO. Once the evaluation has been finalised, SISDO is expected to resume uploads of new loans to the MYC4 platform.
Gatsby Microfinance Ltd (GMFL) is the second largest provider on the platform in terms of volume, having only recently been overtaken by Micro Africa. While GMFL was previously holding more than 40 % of the overall MYC4 portfolio, its share has now come down to 25 % which is a very positive development in terms of provider diversification and risk. The size of GMFL’s portfolio on MYC4 has not changed much in absolute amounts, however, as it has stayed around €650,000 for the most part of 2012. It is expected that 2013 will be business as usual for GMFL on the MYC4 platform.
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BELITA is another small provider on – and off – the MYC4 platform, and since joining in November 2011 focus has been on slow and controlled growth. While BELITA had a good first 10 months as a MYC4 provider, the last couple of months have been relatively challenging in terms of performance. The portfolio at risk above 30 days (PAR30) started to increase back in September and since then BELITA and MYC4 have worked hard to get the loans back on track. While these challenges are being addressed, no new BELITA loans are being uploaded to the MYC4 platform.
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When Makao Mashinani Ltd (MML) became a MYC4 provider two years ago, expectations were high. MML has an innovative approach to providing low-cost housing for people moving out of slum areas and MYC4 was excited to be part of funding these loans. Unfortunately, MML only managed to upload four loans on the platform before it became clear that the partnership was premature; the pipeline of new loans was insufficient. It was therefore decided to do a slow exit with MML, meaning that the four loans are being repaid on a monthly basis (around €4,500 remain outstanding) while no new loans are uploaded.
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As we reported in an update last month, Premier Resource Consulting (PRC) is currently experiencing challenges in terms of institutional capacity and portfolio quality. No major improvements have been made since then in relation to the portfolio performance; however, the bundled repayment that had been pending in the MYC4 system since November did come through last week. The backlog of repayments which has been the source of frustration for investors over the last 4-5 months has thereby been cleared. We will be back with more information on PRC in next month’s provider update.
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MYC4 and Growth Africa mutually agreed to terminate the partnership approximately one and a half years ago when Growth Africa decided to exit the lending business. A handover agreement was then made with Micro Africa (MAL) who took over Growth Africa’s MYC4 portfolio. As mentioned above, MAL continues to manage this portfolio which at this point has less than €600 outstanding. Recoveries on defaulted loans will continue after the active portfolio has been cleared.
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Hi Githa,
Thanks for the update. I was especially interested in the status from PRC (glad to see the batch of repayments in Mid-January; and looking forward to the next repayments) and that of GrowthAfrica. I really hope that MAL are able to ensure some recoveries of the defaulted portfolio.
I liked the blog-post very much – so please make it a tradition to write an update each month – highlighting different providers.
Reblogged this on Krispy's Blog vol (on)gevraagde meningen and commented:
Nuttige post met informatie over alle actieve providers op het platform van MyC4
Thanks for the update Githa. Surprising that GMFL is overtaken by Micro Africa. This organisation has the biggest protofolio by far, devided over several providers (Micro, GMFL and Grotwth) spread over three countries. Do you consider this as a risk or a surplus value?
Regards,
Ward
Hello Ward
Thanks for your question. We treat Micro Africa’s portfolio as one (so one provider) although it’s spread over three countries. From a country perspective, the risk is definitely lower though (which for instance is proving itself now with Kenya’s presidential election around the corner).
Best Regards,
Githa
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