Today, when I funded 2 more Kiva loans, I stumbled across the profile of Laurent D, from Belgium, who has funded 23,079 Kiva loans in the last 3 years. On his profile he states “I love the idea of helping people reach their financial independence”. Well said. And I bow to the dedication of making that many loans.
This got me wondering if there are lenders with even larger portfolio’s funded? There isn’t any information on this in the Kiva stats section.
Update: After using queries at Kivadata.org, it looks to me, that LaurentD actually is the lender, who did the most loans on Kiva, with Good Dogg, from the US, following second with 17,077 loans.
MyC4 has the first three Tanzania loans online. I bid a small amount on the loan requestof Eliamin Eliakimu Swai who runs a car spare parts repair shop in Dar es Salaam. Local provider in Tanzania is Growth Africa Capital, which also serves Kenya.
After the Loanio launch yesterday, already some more loan listings are up at Loanio.com. Right now I count 8 listings. Probably more are in the making. No bids yet, which is not surprising as the lenders have to sign up and transfer money to Loanio first.
Michael Solomon, the CEO and founder of Loanio had a lucky week according to the Loanio blog – not only did he launch Loanio, but he also won $1,000 in the New York State Lottery.
About a year ago I started lending money to African entrepreneurs via MyC4.com. So far it did meet my expectations. The process of uploading money worked without problems, there were always enough loan applications to select from and the offered interest rates were high enough to allow for good returns despite the risks. The only point, where the usability need to be vastly improved is a better status overview for the payment status of all loans in the portfolio. MyC4 does show the payment status in detail for each loan, but its hard to get an aggregate overview.
I invested at 13.8% average nominal interest rate. 194 loans are currently running, 29 are repaid in full, 12 are open/pending (not yet disbursed), 1 defaulted and 4 were cancelled.
To roughly calculate estimate my ROI I looked at my account display at MyC4
About 12-13 months ago I uploaded 1,506.94 Euro. Now my account value is 1,625.24 Euro (9,09 Euro available + 124,62 Euro pending bids + 1.491,93 Euro Outstanding principal). That results in an ROI of 7.9% so far. Naturally it would drop, if the outstanding principal is not repaid in full due to defaults.
The ROI is much lower then the average interest rate, since it does take weeks before an investment in a loan becomes active – and unlend money does not yield interest. A further point is that several late loans affect the ROI.
Lenders at MyC4.com do not have an easy task, when trying to check which of their loans are late on the repayments. The account page does not offer a comprehensive overview page. If a lender really wanted to check in detail he has to click through to the detail page of each loan he invested into.
Officially only one loan has the status ‘defaulted’ so far. However MyC4 so far has no standard policy when a late loan is to be declared defaulted. MyC4 has stated that there will be a default policy by the end of August.
Researching the situation, there are more than 320 loans that are late (fully or partly) with at least one repayment. Of these 72 loans are 3 payments late, 64 loans are 4 payments late, 30 are 5 payments late and 22 are 6 or more payments late.
Another issue that raised some concerns are the first impacts of the changed rules regarding currency risks.
… as some of you might have noticed already the first repayments are now posted on the investors accounts from Kenian investments where we investors are now taking the risk of currency fluctuations.
Within the first period from disbursement to the first repayment the KES has devalued from 97 to 104.5 = 7.2% already. … (Source: see discussion here)
To help lenders selecting loans to invest in, a column with the information whether a loan open for bidding is issued in local currency or in Euro was added to the wiseclerk MyC4 statistic pages.
Monetto.pl, one of the three p2p lending services active in Poland has financed 1450 loans applications resulting in 440 loans totaling 1 million Zloty (approx 0.5 million US$) in 4 months. The average loan amount is 2300 Zloty. The service claims 8000 registered users and a repayment rate of 97% so far (which is said to be a good result).
Borrowers are usually aged 35 to 50, and live in rural areas or small cities. Lenders on the other hand are typically aged 25 to 30 and live in the major cities.
Monetto plans to introduce new features, including guarantees for lenders.
Lucas Banach, CEO of Prender the company that runs Monetto, says that cooperations with e-commerce sites (e.g. Kupujemy.pl) are essential for the growth of Monetto.pl.
Competitor Kokos.pl claims 13000 registered users and 1.2 million Zloty loans on its website. Kokos launched 5 months ago.
I have lend money in over 170 loans on MyC4.com. My average interest rate is 13.8%. There are no defaults yet (not only in my portfolio, but overall). But lately there are several loans that are late (usually up to one month).
In the account balance late loans are recorded as repayments with zero value:
Latest borrower who went late is Sarah Akany, who runs a computer training and internet center in Uganda. I don't really worry, since she went late once before and caught up again.
The provider (CMC) posted the following notice to lenders on the blog:
We have contacted the client and she has promised to clear the late payment. We shall continue tracking the client and ensure payment. Thanks.
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
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.