MYC4 is pleased to announce that we received the first repayment on Premier Kenya’s wholesale loan, a whole week earlier than the due date and at the end of their six month grace period on principal.
In the 2nd Quarter of 2014, MYC4 announced the launch of its pilot of a new loan product;a wholesale product to complement the existing retail loans product. It was a unique one being the first of its kind. The initial wholesale loan product was Euro denominated; thus transferring all currency risk to the micro finance institutions/ providers.
The loan product was to be well secured with collateral that included a Legal Pledge over the portfolio of the provider, Personal Guarantees by Directors and Debenture/ Legal mortgage over all the provider’s assets. MYC4 chose Premier Kenya Limited to pilot said product. The initial loan was 250,000 Euros at 8% interest, which was divided among investors and MYC4 at 50/50. The investor interest of 4% was considered attractive because investors would not suffer any currency loss, and there would be minimal default risk.
Premier Kenya used/is using this MYC4 wholesale loan to scale its retail, micro and small business client portfolio in Nairobi, specifically targeting SMEs and landlords who are providers of low cost housing. 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.
As the pilot was launched, Premier Kenya was 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. Premier Kenya offers starting capital to persons with valid business ideas. These small and medium businesses are enabled to grow and hence the owners and employees are able to take care of their families.
MYC4 would like to have more of this hybrid lending where we can offer providers both retail loans and wholesale/ term loans. MYC4 wholesale loans empower small and medium business entrepreneurs who in turn create employment as well as boost the country’s economy which goes hand in hand with eradicating poverty.
Thanks to the pilot success of this great product, our investors can soon look forward to seeing and fundraising more of these wholesale loans on the platform.