MYC4 is delighted to pilot a new loan product, a wholesale product to complement the existing retail loans product. The initial wholesale loan product will be Euro denominated; thus transferring all currency risk to the micro finance institutions/ providers. The loan product will be well secured with collateral that include a Legal Pledge over the portfolio of the provider, Personal Guarantees by Directors and Debenture/ Legal mortgage over all the provider’s assets. MYC4 has chosen Premier Kenya Limited to pilot this product. The initial loan will be of 250,000 Euros at 8% interest, which is divided among investors and MYC4 at 50/50. The investor interest of 4% is attractive because investors will not suffer any currency loss, and with minimal default risk. The loan is basically for all interested MFIs in the lending business but subject to due diligence and the provider meeting the general terms and conditions.
How the Product looks like on the platform
MYC4 East Africa Ltd (MYC4 EA) is a subsidiary of MYC4 A/S, Denmark and is managing the providers on the platform. Further MYC4 EA is acting as a provider on its own rights for wholesale loans to Microfinance institutions in Kenya. The loan will be Euro to Euro hence no currency risk on the investors’ part.
Mads Kjaer CEO MYC4 has this to say about the new Product;
“MYC4 has the pleasure of partnering with Premier Kenya to introduce the first wholesale loan on the platform, an innovative and complementary product to the existing retails structure. This comes at an opportune time when MYC4 is looking to scale up its portfolio after exiting in Tanzania and Uganda as from the end of this month.”
MicroAfrica was a provider with MYC4 since 2008 until 2013 when they pulled out of MYC4. Micro Africa Ltd was acquired by Letshego holdings last year. As a result of the change Micro Africa Ltd exited on MYC4 platform and now only repaying its outstanding portfolio. Micro Africa was the biggest provider on MYC4 platform till last year and had presence in Kenya, Uganda and Rwanda. To date, through the MYC4 platform, it has disbursed over €2.7 million euro in 2,639 loans and supporting 2,436 businesses across East Africa. The quality of their loans on the platform has been impressive throughout and they haven’t incurred any defaults to date.
Premier Kenya is a new credit-only MFI run by experience microfinance professionals with 15 years of experience in the East African microfinance sector. Premier Kenya was incorporated in the year 2013, the CEO is Tim Carson. Premier Kenya was founded by Tim Carson and James Mugambi who are the former sole directors of Micro Africa Ltd. Therefore Premier Kenya is no stranger to MYC4. Premier focuses on SME and Group Lending with a particular focus on the provision of funds SME borrowers and to landlords that are providers of low-cost housing. Premier Kenya is currently working with Strathmore University to provide business skills training to its SME clients to enable them to enhance their businesses and ultimately borrow larger amounts for longer periods. The company has recruited 2500 active clients in its first 5 months of business and has a portfolio of KES 240million. Average loan size at present is approximately KES 100,000. Loan terms vary from 6 -36 months depending on usage of the funds by the client. The funds will be used to expand the SME and Landlord portfolio.
Tim Carson Had the following to say about the partnership
“I am delighted that MyC4 has expanded its crowdfunding activities into the provision of wholesale loans to MFIs to enable them to meet the needs and demands of clients in a simpler and faster manner. Access to finance continues to be ranked as the major challenge faced by MFIs and their Clients and this crowdfunding initiative will be a valuable initiative to address this challenge”
The Products Premier Kenya Offers are;
- Group loans – product is meant for customers in groups of 3-20. Individuals form the groups and co-guarantee each other when applying/taking loans
- SME loans – this product is the Premier Kenya business loan. We give both secured and unsecured business loans. The unsecured SME loans are offered to small and medium enterprises with no formal securities.
- Housing improvement loans – The housing loan is offered to customers who have construction projects that require completion or customers with rental units that require expansion or additional units.
- Salary loans – This is a loan facility that is extended to employees of institutions and civil servants who have signed a check off agreement with Premier Kenya Ltd.
- Superkwik loans – This is a short term emergency loan with a maximum repayment of period of 1 month. The loan is processed within 24 hour
- Insurance premier financing