This post seeks to give an update on one of MYC4’s providers, Yehu Microfinance Trust.
In this previous post, we mentioned the latest scenario where pending repayments on investor accounts later ceased to appear. This is due to the fact that the Yehu Microfinance Trust staff inadvertently grouped all repayment amounts due without prior consultation with their Finance department regarding the amount collected and available for payment to MYC4.
Unfortunately, due to cash-flow constraints, they were unable to pay all the amounts grouped. Essentially, Yehu had factored in MYC4’s financing in their business plan for the year. The fact that they were not receiving any inflow, yet they are required to disburse new loans to the borrowers who clear their balance, placed a strain on their liquidity. Promise of a new loan is a big motivator for Microfinance institution clients to make repayments.
MYC4 has now entered into a repayment agreement with Yehu, whereby Yehu will pay Kes. 2 Million (approx 20, 000 Euros) monthly. The amount takes into account previous repayment history, reasonable payback period and also the realities at Yehu.
Yehu is a stable, operational, mid-tier microfinance institution in Kenya. Despite the challenges occasioned by MYC4’s change in strategy, MYC4 still considers Yehu to be a valued partner.
Thank you for your continued support.