January appeared slow in terms of loans production but when you compare the volume of loans uploaded Jan 2014 to similar period in 2013, you will realize that there has been a 34% increase in loans funded. For most of January, the Platform appeared to have somewhat reduced activity which is an illusion created by what we can term as “the turnaround effect” in which businesses are now getting their funds much faster once the loans are funded. So we have had a good start to the year.
But that said, some of our providers had a slow start to the year as they continued to experience slow uptake of business loans from borrowers. There are three explanations to this: 1) a significant number of the borrowers were coming for emergency & school fees loans which is typical of January. And those that are not able to get such funding from MFIs often use other sources like shylocks. MYC4’s focus is on business loans in order to ignite entrepreneurship. 2) Some MFIs deliberately slowed down disbursements during this period to avoid a situation where loans disbursed for business purposes are diverted to finance January expenses. Loan diversion is a key ingredient of default. 3) General slow down in economic activities in the region.
The outlook however looks good and we are slowly gaining momentum. We are hopeful of adding new providers this quarter and we are looking at 2-3 new providers in the next 3-4 months. At the same time, business activities are slowly returning to normalcy and loan production increasing. We still project to disburse nearly €1 million in Q1 2014 and this should grow quarter by quarter as new providers come on board.
Thank you for your support in the month of January and we look forward to a great 2014.