How does MYC4 earn money?
The business model is based on transaction fees alone. Investing via the platform is free of charge, and it is free of charge for the African Entrepreneur to try to obtain a loan as the model works on a “no cure – no pay” principle. This means that if a Loan is not funded or the wanted interest rate is not reached, the African Entrepreneur will have no costs. 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 corresponding to approx. 3 percent of the total loan amount. 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, also 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 struct
