Is MYC4 moving away from the original idea of a bunch of small, private investors and towards bigger institutional investors? Is the system too technical for ‘ordinary people’ to comprehend? And are currency fluctuations messing up everything? These are some of the thoughts Peter Schmidt, investor since 2007, would like to share his opinion on.
- First of all, I believe the MYC4-concept is fair. It’s generally a contribution to Africa. I like it personally, because it’s more than just giving away your money to a charity. Everyone can join. It’s smart. It’s a possibility for African entrepreneurs to apply for a loan on reasonable conditions. Also, trade generally creates better relations and makes us more connected to each other across borders.
Peter on borrower visit in Uganda
- The best thing about MYC4 is the direct link between investor and borrower, I’ve not come upon that anywhere else. I think it’s a shame though that this connection isn’t always being exercised. For instance if a big loan defaults, I often miss some more communication from the provider, specifically as to why the loan defaulted. That could be practised a lot better I think.
- An aspect about MYC4 that I think could be better as well, is that many of the technical features on the MYC4-platform are difficult to understand if you’re a ‘simple investor’, one who does not necessarily have a great knowledge of finance and economics. The instalment plan for instance, and the financial terminology such as ‘awaiting feedback’, what does that mean? Sometimes less is more. Too many details often takes the focus away from what’s essential.
I can only agree with Peter on that observation, though emphasizing that there is a fine line between information-density and transparency – one of MYC4′s key priorities. The amount of information might seem confusing to some, but at the same time it’s essential to others.
Peter on another visit
- The original idea about MYC4 being a platform where a lot of private investors throw in a small amount seems to have difficulty gaining a foothold. In the start I thought I should just tell about the concept to ten of my friends, let them tell about it to ten of their friends, and so on, and the viral marketing would be all that was needed to find capital. But now I believe more in the bigger investors. For it to work with a lot of small-scale investors I think MYC4 should be established as a concept where you at least get your money back, and it should be consolidated according to currency loss.
Currency risk remains on investors for now, but at least our intense work on risk share agreements has lowered the investors’ risk.
Thank you to Peter for his inputs and opinions. And remember, I’m still only a click away if you want your story told: rasmus@myc4.com. Or you can engage on our new forum as well.
What MyC4 needs is more small investors . This is obvious to see because many of the larger loans (5000-10000 Euros) fail to get fully funded. Simply because the amount of people investing 5-20 Euros are not enough to raise these sums.
Also there is still the “50% interest fake bids to avoid inactivity” left at end of bidding periods. With more investors these would be cancelled at earlier stages lowering the interest rates at the wanted levels. Meaning more funded loans.
Those of us who have invested a few years on the site have suffered blows of currency fluctuations. Personally I am still to break even (not even counting defaults). This is a problem that needs to be dealt with somehow.
I agree that the providers need to inform the investors always why loans are late or defaulting. I think it´s up to MyC4 to put the pressure on them to change this.
There has been a shaky start. But MyC4 at 2012 should be attractive to investors with more reliable providers than in the past. I would like to know what MyC4 is doing to try and attract more people to change the world.
Certainly the risk sharing agreements mean a lot to me.
So much that my focus has moved away from looking at the security in each project.
Now I focus on mainly on two elements: I want most projects to be financed and I want to maximise my outcome, and I am nearly on break even on the last year. Who knows if I one day will regain the loss from the diasterperiod?
But the risk agreements have also meant that I invest more. I had planed to use only 1000 kr new money a month instedad of 2000 kr when I became a pensioner, but now I have changed that decicion back to 2000.
It would be nice if we could follow the monthly amount of money invested in a graph. Aparently some of the statistics disappeared when we had the massive defaults. May be it is time to let some easy statistics return?
About the discusion of big investors contra small investers I can only repeat that one element I like very much about MYC4 is the possibility that it can be used by both big and small investors and by investors wanting to get a profit and charity investors.
Hopefully we will be able to support even the the bigger loans soon?. When it is visible that risk is down it certainly will help.
Many greetings Erik