Our Tanzanian provider, Mtaji Credit Facility’s portfolio with MYC4 defaulted in the 4th quarter of 2014. This was a regrettable development for MYC4, our investors, Mtaji and all parties involved. The situation cannot be undone but fortunately it can and will be salvaged. This post seeks to update our investors on the new repayment agreement that has been established between MYC4 and Mtaji.
In January 2013 Mtaji Credit Facility (MCF) and MYC4 A/S (MYC4) entered into a cooperation to extend financial services to Tanzanian entrepreneurs and farmers. This cooperation ran smoothly until April 2014 when MYC4 was obligated to cease all activities in Tanzania due to constraints on currency outflows of the country conveyed with short notice by the transfer service provider, INTL.
This abrupt end to MYC4 activities left Mtaji in a difficult position as Mtaji had taken on engagements and responsibilities based on the assumption of a continued cooperation with MYC4. In order to secure continued activities Mtaji was therefore compelled to ask MYC4 for a gradual repayment of the Outstanding Loan Balance as per April 2014.
In the interest of securing Mtaji’s continued success as a micro finance institution, MYC4 accepted a gradual repayment of the OLB from the 2nd quarter of 2014 which Mtaji honoured, albeit slowly.
Unfortunately the intermittent repayment led to the unavoidable default of the Mtaji portfolio on the MYC4 platform. This was an unfavourable development to our investors and all parties involved and MYC4 began working on creating a different repayment system to be put in place that would be beneficial to both parties. MYC4 priority is and has always been engaging all avenues to ensure safety of investors’ investment and continued trust in the MYC4 Platform
Consequently, on 28th January 2015 a new agreement was established between the two parties. This agreement, which was agreed to and signed by MYC4’s Chief Operations Officer (COO), Jes Colding and Mtaji’s Managing Director (MD), Damas Massawe at Mtaji’s offices in Tanzania, guarantees full repayment of the MYC4 loan portfolio with scheduled dates between February and November 2015, starting with a bullet repayment of the 15% loan Guarantee amount to investors already in February 2015.
The repayment schedule takes into account operational obligations of Mtaji so that this promising and growing micro finance institution can continue it’s activities successfully in the future.
This is a great step in the right direction. MYC4 lenders are thus assured full repayment of the Mtaji outstanding loan book before end of 2015, taking into account that they may experience a slight downside of currency fluctuations.
MYC4 would like to thank our investors for the unwavering and continuous support. MYC4 endeavours to ensure repayments are recovered as stipulated in the agreement. More updates shall follow as the process continues.