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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.

Picture1

 

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.

 

premier

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

Newspaper Notice

In follow up to the SMS that MYC4 sent MYC4/KEEF borrowers, MYC4 placed a public notice in the mainstream newspaper, the Daily Nation. The notice ran in today’s 27/04/2015 Monday paper.

Myc4 Public Notice, Daily Nation

Myc4 Public Notice, Daily Nation

As we indicated in our previous post MYC4 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

The SMS in question read:

“Dear(borrower name)Pursuant to termination of the Loan Administration Contract between MYC4 and KEEF, we MYC4 wish to advise you personally that KEEF is no longer administering your loan and that your loan and you are not supposed to make any further payments through KEEF. Any payments made to KEEF after receipt of this notice will not be credited to your Loan Account.

(borrower name)Your Loan of Ksh. …….., advanced through and guaranteed by KEEF, is more than 180 days late. We demand that you pay your outstanding debt within the next 14 days, to avoid legal action to collect. Pay through paybill number 835801 and indicate your name as the account Id, in case of any queries kindly contact us through our Tel No. 0706546010 or visit our offices at Kilimani Business Centre on Kirichwa Road for further information”

 

As stated earlier, MYC4 has taken a Timeout on the uploads of new loans to borrowers in Kenya following a major dispute with one of our providers in Kenya, KEEF who have wrongfully decided to neglect their obligation to repay a large amount to MYC4 investors.
The following are the latest developments on the situation:
1.MYC4 had previously taken the matter to court, but legal counsel advised arbitration as the best way forward. Arbitration, especially in Kenya is bound to take a much shorter period compared with the regular court process that could drag on for years.
MYC4 has already legally terminated the contract with KEEF and filed for arbitration.
2. MYC4 has sent 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
iii.)the details of where to make the repayments
3. MYC4 is putting maximum effort on making recoveries and collecting delayed repayments from all respective providers.
There shall be more updates as the situation continues to unfold.
Thank you for your continued support.

 MYC4 logo - Copy

 

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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