In this update, you can read about Yehu, Micro Africa, Gatsby, BELITA, and PRC. For previous updates, follow this link.
Yehu Microfinance Trust
It’s been a while since we shared some news on Yehu. Essentially, Yehu has been operating quite effortlessly on the platform since the pilot review earlier in the year, and consequently there has not been a lot of information to share. As we have mentioned before, one of the main challenges for Yehu is volume seeing as its average loan size is very small (around €350). After some months of good growth on MYC4 – an average of 23 % monthly between May and August – the outstanding loan balance (OLB) has now reached €167,000. This is a positive development considering that Yehu began the year at €60,000.
Micro Africa Ltd
Micro Africa Ltd (MAL) is now holding around 8 % of MYC4’s total outstanding loan balance (OLB) – down from close to 33 % at the time of exiting. In absolute numbers, it means that approximately €130,000 remains outstanding in Kenya while Uganda is left with just €50,000. Some of MAL’s loans in Kenya fell into arrears in the month of September which resulted in its PAR30 drastically increasing. This was due to a change of responsibilities in the organisation which necessitated a reconciliation by MAL staff with the support of the MYC4 team. The issue has been addressed and the situation is back to normal.
In September, the risk cover of Gatsby (GMFL) was adjusted up from being 10 % of the outstanding loan balance (OLB) to 20 %. This increase was made as a reaction to some performance issues, more specifically due to the fact that GMFL’s PAR30 has been exceeding 5 % for a prolonged period of time. While all providers are required to guarantee their portfolios 100 %, the instrument used to support this guarantee differs from provider to provider (usually in terms of percentage covered). By increasing its risk cover, GMFL’s star rating on the platform has therefore been improved.
Since the first BELITA defaults hit the platform back in July, another 27 loans have defaulted, bringing the total to 40. Just 18 active loans remain which have a combined OLB of €7,500. BELITA continues to honour its risk guarantee agreement by returning the defaulted principal to investors. So far, close to 73 % has been recovered and new amounts continue to be repaid every 1-2 weeks. MYC4 is planning to do an annual review as well as a capacity building needs assessment of BELITA once this portfolio has been fully repaid to explore how best to proceed with the institution.
As we wrote in last month’s update, we had received some funds (€2,000) from PRC which were in the process of being transferred back to investors. In the meantime, we have received another repayment from PRC bringing the total to approximately €4,600. We managed to receive these funds about three weeks ago which allowed for the pending repayments to be processed (i.e. credited to investor accounts). PRC has informed us that another repayment should be on the way which we will naturally follow up on in order to recover as much as possible of the defaulted principal.