Rates and fees

MYC4’s business model is based on transaction fees alone. Investing via the marketplace is free of charge, and it is free of charge for African businesses to try to obtain a loan, as the model works on a “no cure – no pay” principle. However, there are some fees connected to using the platform:

Investor related fees

Borrower related fees

Investor related fees
The only transaction cost investors have is when uploading and withdrawing money to and from MYC4. These fees are not charged by MYC4 but by the investors’ bank. Therefore, the fees may vary from bank to bank, from country to country. Danish investors who withdraw money from their MYC4 account will receive their money from the Danish savings bank Middelfart Sparekasse, while non-Danish investors will receive their withdrawals through the National Irish Bank, which is Danske Banks Irish partner. We advice all investors to get in touch with their bank to get the exact fee for money transfers and withdrawals.


Borrower related fees

MYC4 charges fees for providing the infrastructure that handles the transactions. The business model is based on transaction fees alone. Applying for a loan via MYC4 is free of charge for the applicant. The way MYC4 earn money is that we charge an “interest fee” on the loans, when they are being repaid. The interest commission is 6 percent. Until July 2009, MYC4 was charging a closing fee of 2 percent when the loan was disbursed and an additional fee of 2 percent of the amount repaid on the basis of a declining balance, corresponding to approx. 3 percent of the total loan amount. Comparing the 2+2 percent closing fees and the 6 percent interest commission on a 12 months loan, the total cost for the borrower is very close to being the same.  By changing the fee structure, MYC4 puts our self on the same side as the investors by only earning money when Borrowers repay their loans. Read more here.

Also, our African partners, Providers and Administrators, charge a fee for their services. These fees vary from each Administrator and Provider, but they are stated on each Business in order to create transparency in regards to the cost structure of the loans. Part of the Provider’s and Administrator’s fees is fully dependent on the Business being able to pay back the loan successfully. Under each Business you can not only see the fees that the Business has to pay to the Provider, the Administrator and to MYC4 respectively. You can also see the APR and the total cost for the Business in EUR.

With this model everyone wins: the borrowers get the loan at a rate they can repay; the investors earn income from the interest; our African partners grow their businesses; and MYC4 earns a fee from the borrower over time. Due to the nature of the marketplace with its open bidding process, the model ends up providing a self-regulated marketplace that encourages the borrowers and providers to perform well and the investors to offer lucrative interest rates. 

The loans are repaid monthly with an incentive for the borrower to repay as early as possible since the interest rate is applied on a declining balance basis. Early or on-time repayment also gives borrowers a good track record with MYC4, allowing them to apply for a bigger loan next time. All loans are funded in Euros and issued in local currency.