Here is the last quarterly portfolio performance update of the year 2014.
There were decline in disbursements in the quarter – meaning there were successive declines in each quarter this year. The disbursement figure for the fourth quarter (379,423 Euros) was achieved from only 3 partners; Premier Kenya accounted for 60% of disbursements in the quarter. The fraud situation at KEEF continued to have a big effect on the platform performance: (reduced liquidity on the platform due to non-remittance of repayments has far reaching consequences). Other contributory factors included the stopping of activities in two countries: Good news is that the portfolio in those two countries is being repaid well (Tujijenge Tanzania, Gatsby and Fanikiwa have fully cleared their portfolios; Tujijenge Uganda and Uganda Microcredit Foundation continue repaying their portfolios well. We now have a team that is actively identifying strong potential providers to add to the platform.
The portfolio at risk above 30 days (PAR30) closed the quarter at 18%, which seems (considering effect of defaults on PAR) an improvement compared to 54% in the previous quarter. The net defaults declined sharply in the quarter – from 4% the previous quarter to 13% as at end of the year. There was a high level of defaults in the quarter coming from two providers, 86% from KEEF in Kenya and the rest from Mtaji in Tanzania. Mtaji continues making monthly repayments – thus investors should get all their funds back as recoveries. The relationship with KEEF has turned adversarial, yet we will make the utmost effort to recover the portfolio. Remember default is the technical term for loans that are more than 180 days late – thus, whereas the possibility of full recovery is reduced, the term is not synonymous with loss of funds.
From an investor point of view, the overall net return is negative for the fourth quarter (-4.22%) on loans disbursed by the current providers* in the last five years. The figure is heavily affected by the defaults in the quarter; reduced repayments; lower bids due to competition for available opportunities.
Portfolio Performance – current providers* (click to enlarge)
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 through 3 providers, all in Kenya. Premier Kenya started well on retail loans on the platform and accounted for 60% of the disbursements in the quarter. The other portfolio was distributed among Yehu (12%) and Jubilant (28%).
The distribution of the funds can be seen in the graph below.
Disbursements in € per provider in Q4 2014
(click to enlarge)
Loans disbursed between Q2 2011 and Q4 2011 have experienced forex gain. Without factoring in defaults, the overall net result of 14 of the last 15 quarters – the exception still being Q3 2012 – continues to be positive seeing as interest earned covers losses on currency (see graphs below). There have been significant defaults in the quarter, and this has weighed very negatively on the returns.
Profit & Loss – current providers* (click to enlarge)
Net profit & loss (sum of interest, defaults less recoveries, and currency gains/losses) – current providers* (click to enlarge)
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 €1.16 million in 2,932 active loans. This is a significant decline from the previous quarter’s €1.96 million. The defaults no longer form part of the OLB, and are a major factor in the declining OLB. Over 94% of the portfolio is concentrated in Kenya.
Remember that you can always monitor the development and performance of the portfolio in real-time by following this link: MYC4 Portfolio
* 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,MYC4 East Africa, Premier Kenya.