MyC4
Encyclopedia
MYC4 is a company that facilitates microcredit
s via the Internet
to small businesses in developing countries
.
in May 2006 by Mads Kjær, chairman and former CEO of the Kjær Group and Honorary Danish Consul to Ethiopia, and Tim Vang. MYC4 is currently headquartered in Copenhagen
, Denmark
. As of beginning of 2011, it employs 7 people at its Danish office.
Since the company's creation, 18,730 investors from 112 countries have invested more than €
14 million in 7,163 businesses in seven African countries - Uganda
, Kenya
, Côte d'Ivoire
, Rwanda
, Ghana
, Senegal
and Tanzania
.
Annual reports and up-to-date statistics are available.
Investors who have created accounts on the website can choose from these third-world businesses, which they then bid money towards supporting. They specify an amount, a target interest rate and a minimum interest rate.
Depending on the amount of money offered by investors, and the interest rates, individual bids can proceed at the target or a lower interest rate, or be cancelled.
A bid can be as little as €5, repayment times are usually 6 to 12 months, sometimes 2 years.
Providers, Administrators and MYC4 itself all charge a fee for their services. They vary, but they are stated on each loan, in order to create transparency.
On 29 October 2008, The Industrialisation Fund for Developing Countries (IFU) decided to invest approximately € 1.3 million in Africa through MYC4. The Minister for Development Cooperation of Denmark
Ulla Tørnæs
supports the decision.
The status of the loans, such as number and amount of defaults, are regularly reported on the MYC4 blog.
Potential investors should carefully read the 'Risks' page of the MYC4 website.
The forum, where investors could discuss issues, was disabled in October 2010, being replaced with a blog by the organizers.
Microcredit
Microcredit is the extension of very small loans to those in poverty designed to spur entrepreneurship. These individuals lack collateral, steady employment and a verifiable credit history and therefore cannot meet even the most minimal qualifications to gain access to traditional credit...
s via the Internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
to small businesses in developing countries
Developing country
A developing country, also known as a less-developed country, is a nation with a low level of material well-being. Since no single definition of the term developing country is recognized internationally, the levels of development may vary widely within so-called developing countries...
.
History
MYC4 was founded as a joint ventureJoint venture
A joint venture is a business agreement in which parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets...
in May 2006 by Mads Kjær, chairman and former CEO of the Kjær Group and Honorary Danish Consul to Ethiopia, and Tim Vang. MYC4 is currently headquartered in Copenhagen
Copenhagen
Copenhagen is the capital and largest city of Denmark, with an urban population of 1,199,224 and a metropolitan population of 1,930,260 . With the completion of the transnational Øresund Bridge in 2000, Copenhagen has become the centre of the increasingly integrating Øresund Region...
, Denmark
Denmark
Denmark is a Scandinavian country in Northern Europe. The countries of Denmark and Greenland, as well as the Faroe Islands, constitute the Kingdom of Denmark . It is the southernmost of the Nordic countries, southwest of Sweden and south of Norway, and bordered to the south by Germany. Denmark...
. As of beginning of 2011, it employs 7 people at its Danish office.
Since the company's creation, 18,730 investors from 112 countries have invested more than €
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
14 million in 7,163 businesses in seven African countries - Uganda
Uganda
Uganda , officially the Republic of Uganda, is a landlocked country in East Africa. Uganda is also known as the "Pearl of Africa". It is bordered on the east by Kenya, on the north by South Sudan, on the west by the Democratic Republic of the Congo, on the southwest by Rwanda, and on the south by...
, Kenya
Kenya
Kenya , officially known as the Republic of Kenya, is a country in East Africa that lies on the equator, with the Indian Ocean to its south-east...
, Côte d'Ivoire
Côte d'Ivoire
The Republic of Côte d'Ivoire or Ivory Coast is a country in West Africa. It has an area of , and borders the countries Liberia, Guinea, Mali, Burkina Faso and Ghana; its southern boundary is along the Gulf of Guinea. The country's population was 15,366,672 in 1998 and was estimated to be...
, Rwanda
Rwanda
Rwanda or , officially the Republic of Rwanda , is a country in central and eastern Africa with a population of approximately 11.4 million . Rwanda is located a few degrees south of the Equator, and is bordered by Uganda, Tanzania, Burundi and the Democratic Republic of the Congo...
, Ghana
Ghana
Ghana , officially the Republic of Ghana, is a country located in West Africa. It is bordered by Côte d'Ivoire to the west, Burkina Faso to the north, Togo to the east, and the Gulf of Guinea to the south...
, Senegal
Senegal
Senegal , officially the Republic of Senegal , is a country in western Africa. It owes its name to the Sénégal River that borders it to the east and north...
and Tanzania
Tanzania
The United Republic of Tanzania is a country in East Africa bordered by Kenya and Uganda to the north, Rwanda, Burundi, and the Democratic Republic of the Congo to the west, and Zambia, Malawi, and Mozambique to the south. The country's eastern borders lie on the Indian Ocean.Tanzania is a state...
.
Annual reports and up-to-date statistics are available.
Method of operation
African businesses apply for a loan at a local credit provider, partnering with MYC4. They specify the amount of money they need, the interest they would be willing to pay and the time they plan for repayment.Investors who have created accounts on the website can choose from these third-world businesses, which they then bid money towards supporting. They specify an amount, a target interest rate and a minimum interest rate.
Depending on the amount of money offered by investors, and the interest rates, individual bids can proceed at the target or a lower interest rate, or be cancelled.
A bid can be as little as €5, repayment times are usually 6 to 12 months, sometimes 2 years.
Providers, Administrators and MYC4 itself all charge a fee for their services. They vary, but they are stated on each loan, in order to create transparency.
Major investments
In December 2006, MYC4 received a € 670,000 grant from the Danish Aid Agency under the Danish Ministry of Foreign Affairs.On 29 October 2008, The Industrialisation Fund for Developing Countries (IFU) decided to invest approximately € 1.3 million in Africa through MYC4. The Minister for Development Cooperation of Denmark
Minister for Development Cooperation of Denmark
Minister for Development Cooperation of Denmark is a Danish minister office. The office was introduced with the Cabinet of Poul Nyrup Rasmussen I on 25 January 1993. The minister works in the Ministry of Foreign Affairs of Denmark...
Ulla Tørnæs
Ulla Tørnæs
Ulla Pedersen Tørnæs is a Danish politician and the former Minister for Development Cooperation of Denmark. She is a member of the Liberal Party and, since 1994, of the Danish parliament...
supports the decision.
Risks
As any investment, lending money via MYC4 carries risk. In the past, a significant number of loans defaulted, making investments effectively donations. After major restructuring, profitability has improved, and investors may expect a moderate return on investment.The status of the loans, such as number and amount of defaults, are regularly reported on the MYC4 blog.
Potential investors should carefully read the 'Risks' page of the MYC4 website.
The forum, where investors could discuss issues, was disabled in October 2010, being replaced with a blog by the organizers.
See also
- MicrocreditMicrocreditMicrocredit is the extension of very small loans to those in poverty designed to spur entrepreneurship. These individuals lack collateral, steady employment and a verifiable credit history and therefore cannot meet even the most minimal qualifications to gain access to traditional credit...
- Person-to-person lendingPerson-to-person lendingPerson-to-person lending is a certain breed of financial transaction which occurs directly between individuals or "peers" without the intermediation of...
- Social entrepreneurshipSocial entrepreneurshipSocial entrepreneurship is the work of social entrepreneurs. A social entrepreneur recognizes a social problem and uses entrepreneurial principles to organize, create and manage a venture to achieve social change . While a business entrepreneur typically measures performance in profit and return, a...
- KivaKiva (organization)Kiva Microfunds is an organization that allows people to lend money via the Internet to microfinance institutions in developing countries around the world and in the United States, which in turn lend the money to small businesses and students...