MYC4 A/S was a company that allowed its users to invest microcredits via an internet-platform in medium and small businesses in

developing countries A developing country is a sovereign state with a lesser developed industrial base and a lower Human Development Index (HDI) relative to other countries. However, this definition is not universally agreed upon. There is also no clear agreem ...

Africa Africa is the world's second-largest and second-most populous continent, after Asia in both cases. At about 30.3 million km2 (11.7 million square miles) including adjacent islands, it covers 6% of Earth's total surface area ...

. On December 7, 2016, the MYC4 Foundation informed its investors it has decided to cease its activity and to liquidate as solvent. The MYC4 Foundation was the independent, non-profit entity, accepting funds from donors and holding investors’ money on escrow and separate from MYC4 A/S. The MYC4 platform has been closed as of June 1st 2019 and will not be reopened.

History

MYC4 was founded as a

joint venture A joint venture (JV) is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and economic risk, risks, and shared governance. Companies typically pursue joint ventures for one of four rea ...

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 ( or .; da, København ) is the capital and most populous city of Denmark, with a proper population of around 815.000 in the last quarter of 2022; and some 1.370,000 in the urban area; and the wider Copenhagen metropolitan ar ...

Denmark ) , song = ( en, "King Christian stood by the lofty mast") , song_type = National and royal anthem , image_map = EU-Denmark.svg , map_caption = , subdivision_type = Sovereign state , subdivision_name = Kingdom of Denmark , establish ...

with a regional office in

Nairobi Nairobi ( ) is the capital and largest city of Kenya. The name is derived from the Maasai phrase ''Enkare Nairobi'', which translates to "place of cool waters", a reference to the Nairobi River which flows through the city. The city proper h ...

Kenya ) , national_anthem = " Ee Mungu Nguvu Yetu"() , image_map = , map_caption = , image_map2 = , capital = Nairobi , coordinates = , largest_city = Nairobi ...

. As of the beginning of 2011, it employed 7 people at its Danish office. Between the company's creation to 2011, 19,073 investors from 115 countries had invested more than

€ The euro sign () is the currency sign used for the euro, the official currency of the eurozone and unilaterally adopted by Kosovo and Montenegro. The design was presented to the public by the European Commission on 12 December 1996. It consists ...

15 million in 8,334 businesses in seven African countries -

Uganda }), is a landlocked country in East Africa. The country is bordered to the east by Kenya, to the north by South Sudan, to the west by the Democratic Republic of the Congo, to the south-west by Rwanda, and to the south by Tanzania. The sou ...

Kenya ) , national_anthem = " Ee Mungu Nguvu Yetu"() , image_map = , map_caption = , image_map2 = , capital = Nairobi , coordinates = , largest_city = Nairobi ...

, Côte d'Ivoire, Rwanda,

Ghana Ghana (; tw, Gaana, ee, Gana), officially the Republic of Ghana, is a country in West Africa. It abuts the Gulf of Guinea and the Atlantic Ocean to the south, sharing borders with Ivory Coast in the west, Burkina Faso in the north, and To ...

Senegal Senegal,; Wolof: ''Senegaal''; Pulaar: 𞤅𞤫𞤲𞤫𞤺𞤢𞥄𞤤𞤭 (Senegaali); Arabic: السنغال ''As-Sinighal'') officially the Republic of Senegal,; Wolof: ''Réewum Senegaal''; Pulaar : 𞤈𞤫𞤲𞤣𞤢𞥄𞤲𞤣𞤭 ...

and

Tanzania Tanzania (; ), officially the United Republic of Tanzania ( sw, Jamhuri ya Muungano wa Tanzania), is a country in East Africa within the African Great Lakes region. It borders Uganda to the north; Kenya to the northeast; Comoro Islands ...

. Annual reports and up-to-date statistics are available.

Method of operation

African businesses would apply for a loan at a local credit provider, partnering with MYC4. They would specify the amount of money they needed, the interest they were willing to pay and the a time period for repayment. Investors who created accounts on the website could choose from these third-world businesses, which they then bid money towards supporting. They would specify an amount, a target interest rate and a minimum interest rate. This process is known as a

Dutch auction A Dutch auction is one of several similar types of auctions for buying or selling goods. Most commonly, it means an auction in which the auctioneer begins with a high asking price in the case of selling, and lowers it until some participant acc ...

method and guarantees that the interest rate will be as low as possible, depending on the investor bids. Depending on the amount of money offered by investors, and the interest rates, individual bids could proceed at the target or a lower interest rate, or be cancelled. A bid could be as little as €5, and repayment times were 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 ( da, Udviklingsminister) is a Danish minister office. The office was introduced with the Cabinet of Poul Nyrup Rasmussen I on 25 January 1993. List of ministers External linksOfficial website- fr ...

Ulla Tørnæs Ulla Pedersen Tørnæs (born 4 September 1962 in Esbjerg) is a Danish politician, who is a member of the Folketing for the Liberal Party. She previously sat in parliament from 1994 to 2014, and served as member of the European Parliament from 2014 ...

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, it was hoped that losses will reduce. As a result of this, the first quarterly report released in 2012 showed a portfolio risk that was the lowest in two years. This shows a net return for investors of -0.1%. The forum,Link to disabled forum on MYC4
/ref> where investors could discuss issues, was disabled in October 2010, being replaced with a blog by the organizers.

Liquidation

On December 7, 2016, the MYC4 Foundation - via its liquidator - informed investors it has decided to cease its activity and to liquidate as solvent. Also the former board of directors of MYC4 Foundation came to the conclusion that there was no reason to maintain the MYC4 Foundation as an independent institution with its cost structure as the obtainable debt collections is coming to an end. Investors can withdraw their balance or donate their balance for distribution in accordance with the bylaws for MYC4 Foundation. The bylaws of the MYC4 foundation is stating that in case of liquidation the Foundations funds/donations shall be used for activities, which support the aims and objectives of the UNITED NATIONS concerning the extirpation of poverty. The MYC4 platform has been closed as of June 1st 2019 and will not be reopened.

References

External links

MYC4 website
* * {{DEFAULTSORT:MYC4 Microfinance organizations Organizations established in 2006 Peer-to-peer charities Charities based in Denmark