Press Release: KIAMBU MICROFINANCE DEFRAUDS INVESTORS KES. 112 M

 

 

PRESS RELEASE

For Immediate Release 31 March 2015

KIAMBU MICROFINANCE KEEF DEFRAUDS INVESTORS KES.112 M

Nairobi, March 31, 2015: Today, MYC4 has announced the existence of fraud in one of its microfinance partners, Kenya Entrepreneurship Empowerment Foundation (KEEF). The Danish online lending platform, MYC4, claims that KEEF has defrauded Kes. 112 million in investor funds including accrued interest on the defaulted portfolio. A total of Kes. 245Million was mobilized for KEEF on the MYC4 platform by May 2014; and by August 2014, only Kes. 125Million had been received in repayments. “All engagements with KEEF have since failed and we are fearful that investments from citizens from 120 countries may have been embezzled by the Kiambu based microfinance institution,” says Mads Kjaer, CEO and Founder, MYC4.

MYC4 has claimed to have entered into a contractual agreement with KEEF in 2012 to fund small business in Kenya through the latter’s online lending platform. They further allege to have raised a red flag upon noticing an increase in defaulted amounts. In response to this, KEEF’s CEO, Daniel Kimani revealed that some of his staff members had been implicated in fraudulent matters and were under investigations by the police. Mr. Daniel assured MYC4 and its stakeholders that KEEF remained committed to the partnership.

“Rather than come clean with investors at MYC4, executives at KEEF falsely portrayed willingness to settle the balance,” said Mads Kjaer, CEO and Founder, MYC4.  “The false portrayal has threatened the integrity of MYC4 as a credible lending platform, and even more worrying, the commitment of Kenya’s microfinance industry to access financial services for their informal businesses. Kes. 112 million is no mean fete and we plan to purse it vigorously.” According to MYC4, KEEF’s conduct puts the MFI’s Board of Directors under uncertain light; its existence and functionality is questionable too.

According to MYC4, in addition to the Providers Loan Agreement, KEEF agreed to 100% guarantee borrowers by signing Guarantee and Indemnity Agreement that bound them to settle any defaulted loans. The Agreement stipulates that KEEF should remit the defaulted funds to MYC4 within 10 days after default. It is noted that when the loans first started to default in mid-2014 KEEF did not make any such settlement and since then the entire KEEF loan portfolio has defaulted.

Now MYC4 claims that they will halt activities in Kenya due to KEEF’s embezzlement. “Our experience with KEEF has revealed part of the nature of the microfinance industry in Kenya: there may be more individuals, masquerading as microfinance practitioners, but are using the profiles of unsuspecting entrepreneurs to source for funds to enrich themselves. Investors from more than 120 countries have lost Kes. 112 million in fraudulent dealings and many entrepreneurs in in Kenya’s informal sector will lack funds due to KEEF’s unprofessional conduct. In conclusion, MYC4 is warning potential and current entrepreneurs to be wary of such microfinance institutions.

About MYC4

MYC4 is an online lending platform founded in Denmark under the trade mark MYC4 A/S. The institution carries its operations through an online lending platform where investors from 120 countries across the world make bids to fund profiled entrepreneurs from Kenya. Entrepreneurs are profiled and uploaded by Microfinance Institutions in partnership with MYC4. These MFIs are referred to as providers. See the MYC4 lending process on www.myc4.com

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Wealth creation: Starts with a dream

In life, when you do something that influences at least a person, then you can lead, however, when you influence people to the extent that the people themselves want you to inspire and influence more people, then you are not only a leader but also an inspiration. Daniel Kimani the CEO of KEEF and a partner with MYC4 has scaled to such height.  February 18th 2014 KEEF’s story was retold to many Kenyans in one of Kenyans leading newspaper; The Standard. KEEF,  had a good year, (2013) on MYC4 and also good business in general and Daniel wanted Kenyans and anyone who basically would read his story to be innovator. Kenya being a developing country still has grounds for people to come up with new ideas and implement them, earning wealth and enabling others in the process.

I had a dream

Daniel Kimani first had a idea of starting a micro finance when he was a third year student at a local university in 1999. He first was thinking of himself as he was not sure of getting employment as the rate of unemployment in Kenya was high. This dream grew on him and he found was not only thinking of himself but also the youths back in his village some of whom were his friends, unemployed and without any means of getting financial assistance.  Later after campus, even though he was lucky enough to be employed, many of the youth back home were not and this made him even more determined.

The dream actualized

Later on, Daniel Kimani quit his job, sold his idea to three other like minded people, who together contributed around €3000

The article

and the dream hatched into a micro finance in 2004. Nine year down the line and KEEF is a financial institution that has enabled so many young people in Kiambu and the surrounding neighborhoods e.g. Rift valley province, Eastern and Nairobi provinces. Today KEEF can boast of being able to enable so many people by giving them loans, without straining as they have their activities well planned out.

How to beat competitors 

“You simply have to be innovative… ” Daniel says of dealing with competitors, one has to be on top of the innovation game because there are many micro finances in the area, for KEEF, Daniel has  introduced mobile banking, (client receives a loan through the phone and makes repayments through the phone), to his clients so that they can transact without necessarily visiting the office. He also is able to send money to them in the comfort of the office and he doesn’t have to travel with a lot of money  to remote area. This has not only made business easier to do but it has also made it safer and quicker. By the time other competitors start using this method, KEEF will have come up with other better ways of reaching, satisfying and enabling its borrowers. Make hay while the sun shines, that is for everybody…

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Can’t concentrate? Stick your feet in ice cold water!

When was the last time you stuck your legs in a bucket of ice cold water?  You may have done so, but did you do it to concentrate?  In order to not fall asleep?  I guess not, but that is the case with Daniel Kimani, one of the founders of KEEF (Kenyan Entrepreneurship  Empowerment Foundation). I’ll write about KEEF at a later stage. This short blog post is about the man who stuck his feet in ice cold water.

Daniel Kimani is out of a family of nine, they were dirt poor. When Daniel was nine his father died, but Daniel was old enough to realize that the family was in deep trouble and what that meant to his mother and siblings. And he made a pledge: He would change that, he would some day see his mother in a decent house, not the wooden shed they were living in.

-I wanted to pull my mother out of trouble, and I knew that the way out was education, so I studied hard in school, and I continued to high school. This is where the bucket of cold water comes in. With only the light from some kerosene soaked cloth stuck in a can and with my legs in the cold water I studied at night. The water was necessary to stay awake and not be tempted by the warmth of the bed, Daniel says.

He made his way through university. But on graduation day he was in the town of Eldoret, far away from the university.

– My mother asked me: I have 4000 Shillings, should we spend them on a trip to your graduation? The answer was easy, of course we shouldn’t. So I did not attend my own graduation. And soon after, my mother asked me to leave and make it for myself. So I walked away from my mother with two blankets, one pair of pants, one shirt and 2000 Shillings.

His mother is still alive, 80 years old. And please take a look at the photo. The house is there, it stands as a very concrete monument over Daniels’ determination to change things. And there’s also a shed. Not just any shed but the very one in which Daniel grew up.

Daniel Kimani has not only changed his own and his mothers’ lives. He has changed the lives of many through his work with KEEF.

– If I can help a little Daniel somewhere then my day is made, he says.

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