Africa

IFU and CSR Capital invest 2.2M Euro in Africa via MyC4

wiseclerk 3 Comments

The Industrialisation Fund for Developing Countries (IFU) and CSR Capital have decided to invest a total of DKK 15 million (approx. EUR 2.2 million) in Africa through MYC4. The Danish Development Minister Ulla Tørnæs supports the decision.

“This is an extremely important milestone for MYC4. That IFU and CSR Capital now invest through MYC4 is an endorsement of our initiative as a serious tool in the fight to eradicate poverty in Africa through the marketplace myc4.com,” says CEO of MYC4 Mads Kjær and continues:

“We hope this will inspire financial institutions, pension funds and companies to invest in Africa through MYC4. We are already well under way, but to make a significant difference for the development in Africa, this kind of investors play an important role.”

Political support
Danish Development Minister Ulla Tørnæs warmly welcomes IFU’s initiative to invest in Africa through MYC4.

“Danida has been the facilitator for MYC4. Through the Public Private Partnerships, Danida has supported the development of MYC4. I am glad to see the interest and support for the new marketplace. It shows the economic potential for investments in Africa,” says Tørnæs.

DKK 10 million from IFU, 5 from CSR Capital
IFU is an independent fund under the Danish Foreign Ministry. IFU’s purpose is to promote economic development in developing countries in partnership with the Danish industry, and now the fund invests DKK ten million in Africa through MYC4.

“With the investment IFU wants to contribute to poverty reduction and business development of small and medium enterprises in Africa,” says Investment Manager Kasper Svarrer from IFU.

In addition, the private investment firm CSR Capital invests DKK five million through MYC4. CSR Capital focuses specifically on social and environmentally sustainable investments:

“Good investments and development can and must go hand in hand in order to create the basis for sustainable economic, environmental and social growth and welfare in any society”, says CEO of CSR Capital Sven Riskær.

(Source: MyC4.com)

MyC4 with new look – currency risk now to be covered by lender

wiseclerk 1 Comment

Today MyC4 presents itself in an all new shiny layout. On MyC4 lenders can give loans to small businesses in Africa. Unlike at Kiva, lenders at MyC4 earn interest. So far 1.8 million Euros (approx. 1.2 million US$) have been invested in loans and there are no defaults yet – only several late payments. With the new release …

… three key elements have been prioritized on the new website; usability, design and communication. We have made it easier to understand what MyC4 is all about, how to join, how to upload money, how to find a Business, which fits your criteria and lastly how you invest and re-invest.

According to MyC4 the changes in today's release are:

  • The look of MyC4.com has been updated
  • Improved navigation making it easier to find your way around via a top menu and a left hand menu with sub-levels
  • “Opportunity” changed to “Business” – to access the overview of Businesses, click on “INVEST” in the top menu
  • MyCredits is now changed to EURO (€)
  • The Investor now carries the Currency Risk
  • Withholding tax

I also noticed that MyC4 is no longer marked as "beta".
The handling of currency risk is a major change. The announcement email says:

At MyC4 we want to offer a sustainable and easy to understand solution for the African Businesses. The currency Risk has until now been carried by the African Business, but this has uncertainty for their loan conditions.

To ensure that MyC4 and the African Businesses are sustainable in the long run a new model for the Currency Risk has been developed. We now transfer the Currency Risk to the Investor, which has to be covered by the size of the interest rate you demand.

As a consequence please be aware that going forward there is a Currency Risk on your new investment when investing in some African countries. MyC4 cannot advise on the daily currency development, but based on the last 3 years currency fluctuation we suggest as a guideline that your add the following percentages to your normal wanted interest rate to cover for the potential Currency Risk;

Uganda 6%
Kenya 2%
Côte d’Ivoire 0%

This means that if you where planning to Bid on a Business in Kenya with an interest of 8% in mind you now add the 2% – so you Bid 10%, but will properly get 8% depending on the currency fluctuation over the period of the loan.

 Screenshot of MyC4 in new design
 MyC4 new release

Watch a very interesting MyC4 video

wiseclerk

13 minute video (careful the video is >300 MB, requires fast internet connection) on MyC4. MyC4 facilitates peer to peer microloans to African entrepreneurs.

The video shows the situation in Uganda and many borrowers who talk about their plans. During an audience the founder gets praise by the wife of the president of Uganda for the concept.

Highly recommended viewing.