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In our last update on the KEEF situation, we informed you that MYC4, through its lawyer applied to the High court of Kenya for orders to take the dispute to arbitration since this was provided for in the Loan provider and Admnistrator Contract signed between MYC4 and KEEF. In this post we seek to update you on the developments since the application for arbitration.

The court granted MYC4 the orders and referred the matter for arbitration irrespective of the ongoing court case, as the Arbitration law provides for such. Effectively, the arbitration process causes stay of other proceedings concerning/related to the same dispute.

MYC4 through its lawyer wrote to the Chairman of Kenya Arbitration Council informing him of the court decision and requesting for appointment of an arbitrator. The Chairman indeed acknowledged receipt of the same and confirmed that he will appoint an arbitrator. The Chairman appointed an arbitrator for the matter.

Upon appointment as arbitrator of the MYC4/KEEF dispute, the arbitrator, in writing, invited both parties for a meeting with him on 25/6/2015 (today) to take direction on how to proceed with the process.

KEEF did not appear for the first arbitration meeting today. MYC4 expressed their concern about the delay tactics of the other party. The arbitrator will inform both KEEF and MYC4 in writing about the next meeting to be convened in seven days. Since there have been no court orders staying the arbitration, MYC4 expects that the proceedings will continue uninterrupted, regardless of KEEF’s position.

We shall update you on any new developments. Thank you for your continued support.

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.

As investors, you may have noticed that there seemed to be pending repayments on your accounts that later ceased to appear.

This post seeks to enlighten our investors on the occurrence.

When providers key in repayments on the platform, these amounts appear as pending repayments on investor accounts. Once the funds are validated and received on the platform, the repayments flow into investor accounts. Unfortunately, there have been some loans amounts grouped for repayments but the remittances specified were not received on the platform during the specified time limit hence the funds did not flow into investor accounts. Consequently, the pending repayments were never credited to investor accounts and this is why they no longer appear on the accounts.

MYC4 has urged providers to send the repayments within the specified time limit to avoid such scenarios and we have repayments received as recently as yesterday. Once the repayments are received and validated, they should reflect on investor accounts shortly.

Thank you for your continued support.

Below is an update on providers up until the month of May.

Kenyan Providers

KEEF –  They hold a substantial amount of MYC4’s portfolio which defaulted several months ago. There has been no cooperation from KEEF on all matters repayments for a while now. Attempts at talks to get them to honour their financial obligations did not bear fruit and MYC4 sought legal action.

MYC4 made a request to the court for arbitration as arbitration is a fast and effective option. MYC4’s legal counsel approached the arbitration council of Kenya and requested for the appointment of an arbitrator. The council appointed an arbitrator. MYC4’s counsel has informed the court of this appointment. The court is for the option of arbitration as the way forward for both parties. MYC4’s legal counsel and KEEF’s legal counsel are expected to meet the appointed arbitrator and discuss the way forward. The court case has been halted until the arbitration process comes to completion. However, the court is and can be of assistance during the arbitration process. MYC4 awaits the commencement of arbitration.

Keef

 

Milango – Their PAR 30 currently stands at 99.9%

The MYC4 team was in Milango offices in Mombasa in February for a a portfolio audit exercise and from this exercise, it came to our attention that Milango did not submit to MYC4 investor funds that were collected from borrowers repaying MYC4 loans.

This month of May, the MYC4 team went to Milango offices in Mombasa for a follow up. Milango still hasn’t lived up to the agreement to remit the funds collected. The team discovered that there have been Milango have made further collections and did not remit to MYC4.

MYC4 has written a letter to Milango instructing that the funds collected be remitted within 8 days. A follow up phone-call will be made once the letter is received. MYC4 is awaiting feedback on this.

 

 

Milango

 

YEHU

The MYC4 team is set to visit Yehu Offices in Mombasa for a portfolio audit soon. Meanwhile, MYC4 is following up on repayments as Yehu has not remitted repayments over the last month.

MYC4 has sent a letter instructing Yehu to remit repayments as their PAR 30 is quite high. The letter also sought to find out how they plan to proceed.

Discussion are currently ongoing.

Yehu logo

 

Jubilant Kenya Limited – Their PAR 30 currently stands at 95%.

MYC4 team visited Jubilant offices in Mombasa this month of May and conducted a portfolio audit. Jubilant has made collection on repayments and have not remitted this funds to MYC4.

MYC4 has sent  a letter instructing for the funds collected to be remitted.

MYC4 is awaiting feedback on said matter.

 

 

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Premier Kenya – Premier Kenya has cleared their portfolio with MYC4 and we wish them all the best in their endeavours.

 

premier

Tanzania Providers

Mtaji – Their PAR 30 currently stands at 0%.

Mtaji has effectively adhered with their repayment agreement with MYC4 and we expect their next repayment in July.

Mtaji

 

Uganda Providers

Tujijenge Uganda -Their PAR 30 currently stands at 48%.

We are following up on repayments and we expect repayments for the month of May shortly.

TUG

Uganda Microcredit Foundation – UMF has cleared their portfolio with MYC4 and we wish them all the best in their endeavours.

umf

Myc4 has received several questions from investors and in this post we shall address some of the most recent frequently asked questions.

Q. Are there loans that are still defaulting?

A. Yes, all the loans that are 180 days late belong to Tujijenge Uganda. Myc4 has an agreement with Tujijenge Uganda for monthly remittance. Tujijenge Uganda has pre-paid two months in advance in April; and as per the agreement, they will pay a lumpsum again in May. All their loans that are above 180 days will be defaulted after the May repayments have been processed.

Q. How is Mtaji doing with repayments?

A. Mtaji has adhered to the negotiated payment plan. Mtaji has made repayments of 26, 400 Euros since February 2015.

Q. KEEF aside, have other providers stopped repayments?

A. With the exception of Milango, all other providers are making repayments. Yehu Microfinance Trust did not make repayments in the month of April, but have now entered a sufficient amount on the platform to regularize their position; we expect to receive the funds this week.

Q. What is the expectation on upcoming defaults?

A. Upcoming defaults are from Tujijenge Uganda. Myc4 expects that all defaults from Tujijenge Uganda will be paid off through the monthly repayment agreements and from the Risk Guarantee Fund.

Q. Does the Risk Sharing Funds still have relevance?

A. The Risk Sharing Funds of existing providers are sound. Milango has paid their risk fund to the tune of 28, 850 Euros in February 2015. Jubilant has transferred all their risk share funds to Myc4’s account. The risk guarantee fund of Yehu is in the form of a reliable bank guarantee.

We shall you updated with more information and updates.

Thank you for your continued support. If you have more questions, do not hesitate to contact us on info@myc4.com

 

 

As we indicated in our previous post MYC4 previously sent out bulk SMSes/Text messages to go out to all individual MYC4/KEEF borrowers informing them of:

i.) the legal termination of the MYC4/KEEF contract
ii.) they are to make repayments directly to MYC4
Due to the various inquiries MYC4 has received from MYC4/KEEF borrowers about their savings with KEEF, last week MYC4 sent out a follow up SMS to inform them that:
i.) MYC4 has never been in charge of MYC4/KEEF borrowers’ savings
ii.) MYC4 is therefore not responsible for whatever happens to their savings.
The SMS in question read:
Dear (borrower name) kindly be informed that prior to the termination of the partnership contract with KEEF, and thereafter MYC4 has never handled borrower savings and therefore MYC4 is not responsible for your savings.

Below is an update on providers for the month of March.

Kenyan Providers

KEEF –  They hold a substantial amount of MYC4’s portfolio which defaulted several months ago. There has been no cooperation from KEEF on all matters repayments for a while now. Attempts at talks to get them to honour their financial obligations did not bear fruit and MYC4 sought legal action. Additionally, MYC4 contacted KEEF borrowers who had received MYC4 loans. Majority of KEEF borrowers indicated surprise at having being informed of their loan balances with MYC4. From their testimonies it has come to our attention that most if not all of the borrowers had cleared their loans months or years prior and had submitted all due repayments to KEEF, who have not remitted these funds to MYC4.

Keef

 

Milango – Their PAR 30 currently stands at 99.99 %. We received repayments from Milango amounting to  2,518.64 Euros.

The MYC4 team was in Milango offices in Mombasa in February for a a portfolio audit exercise and from this exercise, it came to our attention that Milango did not submit to MYC4, Kes. 9.2 Million of investor funds that was collected from borrowers repaying MYC4 loans.

MYC4 had a Finance and Strategy meeting with Milango management team and we have come to the agreement that the collection made on repayments should be remitted on a weekly basis as they work on how to fully repay the Kes. 9.2 million.

In a few weeks time, the MYC4 team will be going to Milango offices in Mombasa for a follow up.

Once this exercise is complete, we will provide more updates.

 

Milango

 

YEHU – Their PAR 30 currently stands at 49.53%. We received repayments amounting to 40, 496.53 Euros from YMT for the month of March. Yehu logo

 

Jubilant Kenya Limited – Their PAR 30 currently stands at 16.18%. We received repayments amounting to 6, 884.27 Euros from Jubilant Kenya Ltd for the month of March.

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Premier Kenya – Their PAR 30 currently stands at 0%. We received repayments amounting to 428, 537.59 Euros from Premier Kenya for the month of March.

 

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Tanzania Providers

Mtaji – Their PAR 30 currently stands at 0%. We did not receive repayments from Mtaji for the month of March.

Mtaji

 

Uganda Providers

Tujijenge Uganda -Their PAR 30 currently stands at 99.95%. We did not receive repayment from Tujijenge Uganda for the month of March.

TUG

Uganda Microcredit Foundation – Their PAR 30 currently stands at 0%. We received repayments amounting to 29, 503.68 Euros from UMF for the month of March.

umf

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