MYC4 comment to negative press

MYC4 Comments to negative press Let me begin by stating that overall the criticism has some justification. It is no secret that we are currently facing several challenges with our business model. Our investors are not receiving positive returns on the scale that we and they expected, our partners generally have excessive risk in their portfolios, and 10% of loans have defaulted so far, some due to the unfortunate, and thankfully unique, situation in Côte d'Ivoire, where an insurance scheme (MISCOCI) that should have safeguarded investors' money in the event of defaults went bankrupt. MYC4 decided to cover the investors’ losses. But let us not forget that in just two years MYC4 has managed to build a bridge between 16,000 investors and 5,000 African businesses, facilitating loans to a total value of EUR 10 million. That is something we are proud of. But as an ambitious company with an ambitious growth strategy we have, unfortunately, had to continuously revise our goals in recognition of the even higher than expected complexity in building a strong structure in Africa. We accept responsibility for some of the challenges, while others (such as currency fluctuations in most African countries) are the result of the global economic recession. When MYC4 launched, “all” that we had was a good idea. We did not have any proof of concept, nor did we have a large sum of investment capital ready for disbursements. Our first three partners were therefore starting from scratch just like us. In hindsight, these partners had neither the capacity nor the necessary systems to handle the task. Since September 2008 we have implemented so-called capacity building with all our partners, and several of the partners are making great progress. And on the plus side, through these partners MYC4 has helped create hundreds of jobs in Africa. At the same time we are now working out a strategy to enter into partnerships with more established and experienced organisations in Africa so that we can ensure high quality in the marketplace going forward. But we have had to struggle with the unhealthy portfolio of early loans, especially in the latter part of 2008 and the first part of 2009. We are learning from our experience, and sometimes the hard way. But we must not forget that we are on a journey that no one has undertaken before. Sometimes it takes a detour to get back on track. Both the article in Udvikling and the radio feature are highly critical of MYC4’s actual deficit in 2008 and projected deficit in 2009. All along, our strategy has been not to add high costs for the borrower. We only therefore make the equivalent of about 3% on each loan. With this set-up, our break-even point is some years away. This has been a deliberate strategy, and we therefore see the negative results as an investment in the company rather than a loss. I hope that I have clarified some of MYC4's challenges and helped to draw a more balanced picture of our business and our vision. We are always ready to answer questions, and we ask for your understanding and support in building an essential tool in the eradication of poverty in Africa. Mads Kjær, CEO MYC4 1