We are three days in to the month of July so it is about time that we give you the provider update for June. As usual, you can read more about selected providers below.
Micro Africa Ltd
Since the Micro Africa Ltd (MAL) exit was announced in April, MAL’s loans have been repaying consistently and without delays. The portfolio was reduced by €90,000 in May, and in June another €80,000 has been repaid. The total outstanding loan balance of Micro Africa in all three countries of operation – Kenya, Uganda, and Rwanda – is now €470,000 which corresponds to approximately 22 % of MYC4’s total portfolio. In the month of April, MAL’s share of the portfolio was close to 30 %, i.e. the portfolio is reducing relatively rapidly as expected.
Tujijenge Uganda Ltd
The most recent spot check of Tujijenge Uganda (TUG) revealed some operational shortcomings in terms of adherence with the MYC4 model. More specifically, it showed that Tujijenge Uganda had been pre-funding some loans, meaning that loans were disbursed to borrowers before receiving funds from the MYC4 investors. In order to address this, Tujijenge Uganda has been temporarily paused from uploading new loans to the platform. Furthermore, these shortcomings resulted in TUG receiving a low spot check score of 4. We expect to see new loans on the platform again soon, albeit at a lower volume as TUG will be working on diversifying its sources of funding going forward.
Fanikiwa joined the MYC4 platform in February this year and managed to grow its portfolio in a matter of months. The activity was slowed down when the maximum outstanding loan balance was reached and since then we have seen very few Fanikiwa loans on the platform. This is mainly due to two things: Fanikiwa is first of all a young institution which continuously works on building capacity. As part of these efforts, Fanikiwa is currently going through a process of organisational restructuring; secondly, Fanikiwa is waiting for MYC4 to carry out a pilot evaluation which has been postponed to after the restructuring has been completed.
When SISDO came back to the platform in April – after addressing some operational challenges that had resulted in a poor portfolio performance – it was expected that SISDO would double its OLB of €140,000 at the time. While this projected volume has not materialised (the OLB has been stagnant at €140,000), the performance has been very good in the last 3 months. SISDO is currently working on introducing two new loan products, one in agriculture and one in asset financing. The new products will enable SISDO to include more branches in its activities on the MYC4 platform.
BELITA is still paused from further uploads to the platform. The problems for BELITA have primarily stemmed from imprudent liquidity management and deficiencies in the processing of loan repayments. These challenges are part of the growth curve of young MFIs, and we feel confident that BELITA has learned a costly lesson – and will emerge stronger. The total disbursement to BELITA amounts to €130,040 of which more than 80% has so far been repaid (excl. interest). BELITA remains committed to repaying the remaining outstanding balance on MYC4, and it is positive to note that its risk guarantee fund, held in the form of a fixed deposit account, now covers 94% of the OLB.
PRC no longer has an active portfolio on MYC4.
We gave a detailed update on the situation with our only remaining provider in West Africa in a blog post a couple of weeks ago (read Update on PRC). Unfortunately we have no other news to share this month, but we will of course be back with more information as soon as there are any new developments in Ghana.