Business blogs

Blog Post: Welcome Note

Premier Resource Consulting | 18.09.2008 15:28:34 CET |
Hello,

Welcome to Ghana. We have our first opportunity on the platform now.

We would be pleased to answer all  questions from you.

Thank you.

Signed
Premier Resource Consulting (PRC)

10 comments on this blog post:

Henrik Otte Bøtker
27.04.2009 07:40:12 CET


Hi

Please look into this:

https://www.myc4.com/Portal/WebForms/Opportunities/ViewOpportunity.aspx?OpportunityId=4640

Second month - no repayments. You told there was one for march - and we didn't get it.

Best regards

Henrik



Kathy
27.03.2009 14:19:55 CET


Please look into this one.  Has a payment been made in March, or are they late?  If they have not made a payment this month, please update the loan details and leave a posting on the Business blog.

https://www.myc4.com/Portal/WebForms/Opportunities/ViewOpportunity.aspx?OpportunityId=4489


Thankyou.
Kathy



Henrik Otte Bøtker
25.03.2009 11:24:55 CET





P2P-Banking.com (C. Lehmann)
25.09.2008 16:09:24 CET


From what I remember:

I believe technically yes,
but currently all listed ones are in Euro



Joerg Schwieder
23.09.2008 23:50:26 CET


One "technical" question: When MyC4 started, the borrower had to take the currency risk, not the lender. Don't get me wrong: I was one of the people strongly advocating the move to make investors take the currency risk and I still think it's the right way to go.

However, in a case like the one you describe, where an export-oriented business is actually ABLE to take the currency risk (and therefore lowering it's interest), is it technically (for the MyC4 platform) still possible to issue loans in Euro?

Cheers,

Joerg



Premier Resource Consulting
23.09.2008 07:18:59 CET


 

We very much appreciate the concerns of the investors particularly regarding the current devaluation of the Ghana Cedi. In real terms, the value of the Ghana Cedi has gone down by about 20%. This develuation has been very recent particularly in the last two months, which compelled the central bank to raise the prime rate from 14% to 16% and 19% within the last three months. I am certain that the average devaluation of the Ghana Cedi for the period under review (from redenomination) should be much lower. I would inform you of the offical figure in due course. In this regard, the arguements have pointed to artificial develuation and therefore the GH Cedi is expected to stabilize pretty soon.
 
 
In reality, the approprate interest for investors barring any lose in value of their investment could be 20%, which would be 1% above the Central Bank's (Bank of Ghana) prime rate. The banks spread has been between 10% and 13%. The overall interest rates range between 29% and 32%. At this point the platform would not be realizing the objective of offering competitive interest rates. We are aware of the challenges inflation and devaluation presents in the instance of lending in developing countries, which must be a critical issue for MyC4, particularly in the mission to make finance available to MSMEs.
 
Nonetheless, PRC has taken discussion with the beneficiary, Dreams Galore, to explore the possibilities of adjusting the interest rate should the current devaluation continue. The response has been very positive and DG is desirous of accepting negotiated rate to reflect realistic value for the investors. DG recognizes its position to adjust earnings without major constraints as the principal cost elements of production have large local content over 90% and also high export potential both directly and indirectly. This would contribute to offering the products good sale prices.  
 
Please revert to us should you require further information or clarification.

Thank you.



Yamuna
20.09.2008 08:58:44 CET


Congratulations Premier Resource Consulting for uploading your first business on Myc4

Thank you Joerg for noticing the devaluation problem. It is important for us investors to get some more clarity about this.



Joerg Schwieder
19.09.2008 20:08:49 CET


Stephane,

thanks for the quick answer.
I checked the rate against the dollar and you are right, it looks much more stable there - although they still have around a 7-10% annual loss against the dollar long term.

I'm not overly optimistic about the dollar since the are producing quite a bit of inflation over there in the US these days but that should not harm business with Africa, if that turns out to be a very long term thing African countries will turn towards Europe as a benchmark.

I understand that the rates you agree on are  in the competitive range I just wanted to know whether I got something wrong about the exchange rate. This is international business and we need to understand the metrics of that. We are all used to our domestic situation and probably to the situation in some other big economies but few of us have lots of past experience in doing business with Africa.

What I see here, is a currency that is somewhat stable against the dollar - at least more stable than the Dollar is against the Euro - and that gives some confidence that probably some of this is just a Euro/USD-cycle thing. Although that doesn't take away the risk, of course, but we are used to handle a deteriorating dollar these days, aren't we?

This is one thing I like about MyC4: You learn a lot about the world that you didn't know before...

Cheers,

Joerg



Stephane Le Bouder
19.09.2008 19:29:45 CET


Joerg,
thanks for your comment.  I think that MyC4 may need to double-check the source of the data we're displaying.  The data may be wrong, as a result of the currency code changing about a year ago.  We need to double check that. 

However, regardless, the lending rate we agreed to with PRC is well in the norm for acceptable rates in microfinance in Ghana.  Increasing the lending rates would definitely push us into what is perceived as usurious/abusive rates for the local market which, obviously, we don't want to do.  Second, when evaluating the future change in exchange rates, it's equally important to look at the expected performance of the Euro, which is at all-time highs.  This may continue, or it may not.  I have no opinion here, but it matters to take it into considerations.  Many African countries have economies that are very reliant on natural resources, especially oil, which are traded in Dollars.  For this reason, they tend to try to stabilize their currencies relative to the Dollar, which has weakened significantly against the Euro, as you well know.  This isn't to say that African currencies haven't been historically unstable and trended downward, but maybe the past year isn't a very good predictor of the next year.  Again, I don't know.  Just food for thought. 

Stephane




Joerg Schwieder
19.09.2008 16:45:39 CET


Congratulations for putting up the first business from Ghana.

I am happy to be part of that business (hopefully).

However, there's one thing I would like to see clarified.

As of your Country data, the New Cedi has devalued about 35% over the course of the last year.
If this data is correct, are you sure a wanted interest of 12% for a 18 month creadi issued in local currency is sustainable? I mean, this means that I will have to expect to lose 20% of my investment on that business.

While this is fine for me for a smaller sum and the first investment, I don't think it's something that will be possible in the long run.

Or am I getting something wrong here?

Joerg


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