ivory coast

Little Progress in MYC4’s Recovery Attempts

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As reported in the past MYC4.com has serious operational problems making it an investment with negative ROI for the vast majority of lenders. MYC4 has taken measures to recover as much of the outstanding loan amounts as possible, but progress is very slow.

This is a quick update on the situation

Kenya / Provider Ebony:
The receivership has been in place for two months now, but has recovered only a small amount. The court case against Ebony Capital Ltd. is ongoing still awaiting a ruling. (see details)

Ivory Coast / Former providers Ivoire Credit and Notre Nation
The responsibility for collecting these loans has been turned over to TRIUM International in September 2009. In the 5 months since then TRIUM International collected 17,848 Euro. TRIUM has asked to be relieved of the contract as soon as possible (see details)

Senegal / Provider Birima
Repayments have been delayed. Birima cites technical problems and a bad economic situation in Senegal.

Uganda / Provider FED/CMC
FED seems to have the worst status. MYC4 reports that collections nearly stopped due to a lack of staff and  working capital. Borrowers are said towithhold repayments in speculation on a collapse of FED/CMC.
MYC4 has defined 10 action steps for March and April. (see details)

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MYC4 will cover for MISCOCI loans

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Acting on problems that came about when an insurance scheme, that was supposed to cover over 200 loans in Ivory Coast, failed (see previous coverage), MYC4.com announced it will reimburse all lenders on these loans, if the loans default.

Mads Kjaer, CEO of MYC4, announced:

We have in previous update informed that we will intervene and take on the obligation towards the Investors and cover defaults on loans. MYC4 will cover all defaults on MISCOCI covered loans. In actual numbers this could amount to a total cost of EUR 388,000. This will put financial strains on our company, yet we believe it’s the right thing to do.

Now, what does it mean that MYC4 covers MISCOCI included loans? As noted, 242 loans in Cote d’Ivoire were supposed to be covered by MISCOCI insurance. These 242 are very likely to default within the near future – some are already defaulted (cf. MYC4’s default policy) and therefore MYC4 will cover Investors’ loss on their principal.

This means covering the spread between what has already been paid back and Investor’s principal or in other words: MYC4 will step in to reimburse Investors whatever amount they still have not received of their original investment. Meaning the original bid value minus total received repayments over time. We are currently working how we technically can do this in the system and will revert back with an update in two weeks time.

Loans without MISCOCI:
With regards to the not MISCOCI-covered Cote d’Ivoire loans, we are aiming at a solution that will create the best possible chances for Investors to get some of their money back by ensuring that Notre Nation and Ivoire Credit will continue to collect repayments also after the technical default on the platform.

Lenders welcomed this decision in forum feedback.

Other MYC4 news:

  • MYC4 wins prize as “best financial e-commerce” by FDIH, the Danish Association of Internet and Distance Trade
  • The first bid by IFU and CSR was made on MYC4 in their aim to invest 2.2 million EUR on MYC4 (see earlier coverage)

MYC4 providers react on high default rates

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Over the last months it became clear that MYC4.com loans default at a much higher percentage then expected. MYC4 management states several growth and quality problems that led to the situation. Better training of the local providers, partner ratings, spot audits and a license system are measures that shall improve the quality in loan selection and management in the future.

Currently one challenge is to deal with the failing loans issued in the past. The earlier problems with Ivory coast loans continue. About half of the issued loans were insured by the organisation MISCOCI against defaults. MISCOCI failed today and is reported to be bankrupt. MYC4 has announced a few minutes ago, that they will publish until March 20th, what this means for the lenders on the defaulted Ivory Coast loans (MISCOCI covered 242 loans with an outstanding balance of 388,644 Euro).

NotreNation, one of the providers in Ivory Coast, yesterday named poor selection of borrowers by inexperienced credit agents and the difficult economic situation in Ivory Coast as reasons for high default rates.

GrowthAfrica, a provider in Kenya with a high portfolio at risk rate (PAR) has announced yesterday that it will buy back 65 very poorly performing loans at 95 percent of the balance from the lenders. This step was taken as GrowthAfrica felt they share responsibility for the poorly performing loan portfolio. GrowthAfrica expects to buy back loans for more then 125,000 Euro in total.

MyC4 cancels 200,000 Euro pending Ivory Coast loans

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Myc4 logoMyC4 will cancel 105 open and pending loans to borrowers in Ivory Coast (Cote d’Ivoire). This is scheduled to take place next week. Money from the bids will be returned to the lenders. Some lenders are unsatisfied with the situation as the bids in these loans tied up their money for up to 6 weeks without interest.

Announcement from MyC4:

Notre Nation and Ivoire Credit have decided to cancel all open loans currently pending on the MyC4 platform. This is being done for two reasons.  First, both Ivoire Credit and Notre Nation are undergoing significant reorganization and operational changes, to plan for improvements and scaling of operations.  This is putting significant pressure on both organizations and we expect that there might be delay in some payments going forward. Second, there has been a relatively long period since many of these Businesses were uploaded, and the current expected loan disbursement dates. To ensure that the borrowers’ situations have not change would require a new due diligence of each, which current resources don’t allow, given the long list of loans.  Therefore and to protect Investors MYC4 has agreed to return all funds to Investors. This will be done within the next week. If you have money tied up in a Bid to any of these Providers your money will be transferred back into your Account immediately, when the cancellation is done of your specific loan. MYC4 is planning to cancel 105 loans.

MYC4 resume uploading of Businesses from Notre Nation and Ivoire Credit within the coming months, and they will continue to diligently manage the existing portfolio in the interim. If you have more questions please use the Blogs of Notre Nation and Ivoire Credit. We are sorry that your money has been inactive for 4-5 weeks and we apologize.

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MyC4 lender headcount doubles after national TV coverage

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After MyC4.com was featured on Danish national TV in a 15 minute feature many new lenders signed up. Within 3 days lender count rose from about 500 to currently 964. At MyC4 lenders (called investors) loan money to African entrepreneurs. The bidding frency of new lenders did lower closing interest rate dramatically. Loans now closed at 2 to 3 percent lender interest rate (previously usually 10 to 12 percent). MyC4 will now have to increase the number of listings, otherwise they might be temporably be sold out like happened to Kiva.
Yesterday the first loan listings from Ivory Coast went online.