Kiva did billboard advertising on highway 101. Apparently the ad was sponsored by Paypal.
Matt Flannery of Kiva speculates whether the board brings 125 additional visits per day to the website (0.04% conversion rate) or if user growth on the sampled weeks had other causes.
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:
Dear investors,
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$) have been invested in loans and there are no defaults yet - only several late payments. With the new release …
… three key elements have been prioritized on the new website; usability, design and communication. We have made it easier to understand what MyC4 is all about, how to join, how to upload money, how to find a Business, which fits your criteria and lastly how you invest and re-invest.
According to MyC4 the changes in today's release are:
I also noticed that MyC4 is no longer marked as "beta".
The handling of currency risk is a major change. The announcement email says:
At MyC4 we want to offer a sustainable and easy to understand solution for the African Businesses. The currency Risk has until now been carried by the African Business, but this has uncertainty for their loan conditions.
To ensure that MyC4 and the African Businesses are sustainable in the long run a new model for the Currency Risk has been developed. We now transfer the Currency Risk to the Investor, which has to be covered by the size of the interest rate you demand.
As a consequence please be aware that going forward there is a Currency Risk on your new investment when investing in some African countries. MyC4 cannot advise on the daily currency development, but based on the last 3 years currency fluctuation we suggest as a guideline that your add the following percentages to your normal wanted interest rate to cover for the potential Currency Risk;
Uganda 6%
Kenya 2%
Côte d’Ivoire 0%This means that if you where planning to Bid on a Business in Kenya with an interest of 8% in mind you now add the 2% - so you Bid 10%, but will properly get 8% depending on the currency fluctuation over the period of the loan.
Screenshot of MyC4 in new design
Credit card issuer Advanta entered into a partnership with Kiva. The initiative is called KivaB4BProject and Advanta will match the loans made by business card holders with up to 200 US$ per card. Card holders simply select a business owner to sponsor through Kiva and make a grant using their Advanta Business Card. Advanta matches that grant, dollar for dollar, and Kiva distributes the total resulting funds.
The loans funded by this project can be seen on this Kiva lender page. Already contributed to more than 500 loans.
When the project was announced at Advanta's headquarters, Advanta flew in Kiva borrower Senerita Lilli a dressmaker from Samoa to share her story.
MyC4 has just published a quarterly magazine to accompany it's website. The first issue of Change has 20 pages, looks stylish and has lots of information (e.g. Senegal will be the next market, where loans are available to borrowers starting in June). Here is what MyC4 says about it's magazine:
We have just released the very first issue of CHANGE - the magazine that comes all way around MyC4: Vision, business model, partners, supporters, etc.
MyC4 has successfully funded 1000 loans to entrepreneurs in Africa since launch in May 2007. So far none of the loans has defaulted and average interest rate for lenders is 11.7%.
Tim Vang, one of the co-founders of the Danish startup told P2P-Banking.com that the MyC4 will release a new version in May with a new design and better interface. MyC4 also plans to provide loans in additional countries (currently Uganda, Kenya and Cote d'Ivoire).
MyC4's annual report 2007 is available on the Internet (English and Danish). While the company realised a loss of 2.8 million DKK (approx. 0.6 million US$) in 2007, it aims for break even in 2009.
(Source: MyC4 loan statistics, Wiseclerk.com, Apr. 19th)
Kiva.org, which allows everybody to help funding microloans to entrepreneurs in developing countries, will achieve the milestone of 25 million US$ loan volumn within the next two days.
Launched 2005 the amazing growth curve can be seen on this Kiva stats page. The growth accelerated in 2007 driven by major media coverage. Up to now more then 260,000 individual lenders have funded more than 37,000 loans in 42 countries.
The current default rate is only 0.11%. While Kiva lenders do not receive interest, borrowers pay interest to the local Kiva Field partners (microfinance institutions).
Kiva, founded by Matt and Jessica Flannery (picture), is a non-profit which currently has 16 employees paid by optional 10% lenders can donate on top of loans. Apart from them many volunteers aid the Kiva cause.
A February 2006 survey showed that Kiva donors were evenly distributed between 25 and 60. Slightly over half were males, and 65% made more than $50,000 a year. But a $25 cap on individual donations is causing the demographics to spread; more older, younger, and less-well-off people are signing up. Kiva has about 15,000 to 20,000 visitors a day coming to the site now.
While lenders may withdraw funds via Paypal upon repayment, 90% decide to reinvest the money into new loans.
(Picture courtesy Kiva.org)
A very interesting study that mainly concentrates on donations covers aspects of social lending too. Among the 24 online philantrophy markets examined are Kiva and MyC4. The study gives great advice what users (donors and lenders) expect from the market (the service) as functionality.
The study comments on Kiva:
Kiva’s entire business model was, from the start, faced with seemingly insurmountable logistical issues. From verifying the legitimacy of entrepreneurs’ claims straight through to delivering repayments to investors. In addition the challenges of distance, cost, and time were considerable. By partnering with carefully-selected microfinance institutions (MFI) already working in a particular area, however, Kiva has been able to overcome all of these hurdles. … And each MFI’s reputation as an accountable, socially responsible organisation must be unimpeachable with Kiva or another highly regarded organisation such as the US Peace Corps. Partnering with MFIs also overcomes the communication issues encountered working with small businesspeople in developing countries. Whereas very few small business owners in developing countries have Internet access or English language skills, all of the MFIs must have these in order to work with Kiva. This compromise enables individual stories from entrepreneurs, relayed by MFIs, to reach investors both before a loan is disbursed and after its effects are felt. Though loan repayments have been generally taken as a ‘proxy for success’ in the MFI industry, it is these personal stories, says Kiva’s Ben Elberger, which are
most important to most of its donors: ‘The lenders are more interested in the qualitative results than the quantitative…They are more interested in learning what happened to the entrepreneur than they are in getting their money back.’ Thus, the information provided by Kiva’s partners in each of their business’s journals is very rarely financially detailed; rather, it tells the story of how the loan will (or has) impacted on the day to day life of the business owner.What does the future hold for Kiva? One of its primary goals has become strengthening their partner MFIs, helping them reach a more sustainable financial position so that fluctuations in funds received from Kiva will not impact their overall ability to lend. It is also developing an internal reporting system, but identifying common indicators for MFI and businesses has been extremely difficult, and it is unsure that such a framework is even possible. The biggest variable for the future, it says, is to what degree the public’s moral attention to sustainability and development will last.
MyC4 is given as example for the useful integration of Web 2.0 technologies to create an interactive market.
While a long read (over 50 pages without appendix) I believe it to be interesting for all p2p lending services especially the product development and marketing managers.
MyC4.com accelerated growth during the past month. This is shown by stats on MyC4Stats.com (provided by Wiseclerk.com) showing the loan volume by origination month. Compared to earlier months the loan volume rose sharply in December and January. In December 150,000 Euro loans and in January 250,000 Euro loans were disbursed to African entrepreneurs.
(Source: MyC4Stats.com)
The new MyC4Stats page offers reports helping lenders to find open MyC4 loan listings with the best rates. At MyC4 - unlike at Prosper - every lender funds a loan at his individual interest rate. In fact 50 different lenders funding one specific loan may each earn different, self-set interest rates. While MyC4 sets a maximum for the weighted average interest rate for each loan, it is still possible for an individual lender to bid higher and earn more after funding.
Example: A 2500 Euro loan to Clementine Gbrou, who exports grains to Europe the maximum weighted Wanted interest rate was 12% (lender interest, not borrower). This loan closed with a weighted average interest rate of 11,64% (lender interest). The individual lenders in this loan earn DIFFERENT selfselected interest rate between 3% and 13.5%. Several lenders thus achieved above average rates.
How to find the best loans?
To select the loans with the best rates for bidding in the listing phase a quick overview of available listings sorted by the maximum possible interest rates that can be bid, is important. Several tables on MyC4Stats help lenders on this. Sample screenshot:
(Source: MyC4Stats.com)
The report presents the listings sorted by maximum interest rate (column Maximum bid) that can be bid and states the Euro amount above this rate that serves as a buffer before being outbid. The buffer is caused by the rule that new bids must always be place at least 0.5% lower then the current high bid.
Watch the following video explaining why a Google.org initiative has commited 10.1 million US$ to fuel the growth of small and medium sized enterprises in developing countries. With a focus on India and East Africa Google aims to:
While you cannot lend as an individual in this Google initiative, have a look at Kiva, MyC4 or Microplace which have similar aims.
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