Here is the fourth quarter portfolio performance update of the year 2013.
The volume of loans disbursed in Q4 was maintained at almost the same level as Q3. In Q4, total €1,014,000 in 1381 loans was disbursed compared to €1.1 million in Q3. This was a great performance given the fact that our providers did not approve new loans for two weeks during the Christmas period.
In terms of performance, portfolio continues to be healthy although the portfolio at risk above 30 days (PAR30) rose slightly to 5.4%. This was largely due the Christmas break and some repayments were not entered on time by some providers. The net defaults remained below 2%. It is also positive to note that cancellations of open loans reduced from around €72,445 in the third quarter to €29,156 in the final quarter.
The defaults for the quarter reduced by 214% from Q3 and these primarily came from BELITA, but these were to a large extent offset by the recoveries. From an investor point of view, the overall net return is again positive at 1.9 % on loans disbursed by the current providers* in the last four years. This is an indication of stability in overall net returns when looked at in the light of the last few quarters: 1.7% for Q3 2013, 1.6 % for Q2 2013, 1.5 % for Q1 2013, 1.7 % for Q4 2012 and 1.9 % for Q3 2012.
The Portfolio Performance Graph above shows the performance of loans disbursed since 2010 divided by quarter of disbursement. The colour blue shows funds that have already been repaid, green shows amounts that are being repaid on time, yellow indicates the balances on loans that are currently more than 30 days late, while red shows the net defaulted principal (i.e. defaulted principal less recoveries).
The disbursements were distributed among 9 providers, three in each of our countries of operation (Kenya, Uganda and Tanzania). Tujijenge Tanzania was the most active in the quarter with 31% of the total disbursements, followed by KEEF in Kenya at 23%. The other significant ones were YEHU in Kenya at 13% and Uganda Microcredit Foundation (UMF) at 10% of the total disbursements in Q4. The distribution of the funds can be seen in the graph below.
There were not a lot of changes in terms of the profit and loss. Loans disbursed in 2012 were further affected by currency losses, but the overall net result of 9 of the last 10 quarters – the exception still being Q3 2012 – continues to be positive seeing as interest earned covers losses on currency and defaults (see graphs below). Loans disbursed in 2013 have not been affected that much by currency fluctuations, but considering that 65 % is still outstanding on this portfolio, it is too soon to know how it will develop in the months to come.
The Profit & Loss graphs above show the current result on loans disbursed since 2010 divided by quarter of disbursement. In the first graph, the colour green shows the earned interest, the red indicates the net defaults (i.e. defaulted principal less recoveries), and the purple shows the net realised currency gains or losses. The second graph shows the same figures as a net sum to give an easy overview quarter by quarter.
The total MYC4 portfolio closed the quarter with an outstanding loan balance (OLB) of €2.35 million in 5,188 active loans. This is an increase from the previous quarter’s €2.24 million and an overall growth of 3.7% in 2013. This modest growth was achieved despite Micro Africa, our largest provider at the beginning of 2013, not being active for most of the year after a take-over by an investor. Around 47 % of the portfolio is concentrated in Kenya where KEEF is the largest provider; 26 % is held in Uganda where Gatsby is still the largest (despite being paused due to high PAR); and with 27 % in Tanzania with Tujijenge Tanzania having increased activity.
(Remember that you can always monitor the development and performance of the portfolio in real-time by following this link: MYC4 Portfolio)
At the end of Q4, +83,300 people had been influenced directly through 16, 927 businesses funded through MYC4. 82% of these businesses are informal and majority (61%) are owned by women. Business and farming loans continue to be the major funding areas accounting for 71% of the loans disbursed. Others include service, education, health and renewable energy loans.
* Current Providers: GrowthAfrica, Gatsby Microfinance Ltd, Micro Africa Ltd, Premier Resource Consulting, Tujijenge Tanzania, Fusion Capital Ltd, Makao Mashinani Ltd, Tujijenge Uganda, BELITA, KEEF, Yehu Microfinance Trust, SISDO, Fanikiwa Microfinance Company Ltd., Mtaji Credit Facility Ltd, and Uganda Microcredit Foundation Ltd.