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Spark Africa. New Business Perspectives

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Spark Africa is always looking for new businesses and surprising initiatives. Today, we report from Rwanda and the Netherlands.

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Rwanda. Population: 9.9 million. GNP per capita: USD$238. Economic growth 2008: 7.5 percent.

ANETTE UWERA [Spark Africa, Rwanda]

Via the MYC4 website, aimed at supplying loans for local entrepreneurs, many businesses in Africa are made possible. Today, we follow the investment of a Dutch investor, who supports a local silversmith and makes money himself as he gets part of the interest on the loan. Kivuye runs the Bijouterie De La Ville in Kigali, the capital of Rwanda. With some success, he has now three employees. This has been a single-handed achievement, and not by the courtesy of local banks, which are reluctant to lend money to small entrepreneurs and charge considerable interest rates, as they believe the risk is too big.

KIVUYE YAHYA [Silversmith, Bijouterie De La Ville]

I realized that MYC4 charges lower interest rates than other banks. And that's why I chose MYC4.

ANETTE UWERA

The interest rates that Kivuye pays can still amount to rates of 30 to 40 percent due to both transaction costs and the middle man. By using a binding system, right now around 13 percent of the interest the investors receive is produce. Everyone can invest money in small enterprises in African countries through the website. This is how a portion of the loan for Kivuye's shop in Kigali comes from a living room in Rotterdam.

KRISPIJN BEEK [MYC4 Investor]

I used to give around 200 to 300 euros a year to different development organizations, like Oxfam, Novib, Hivos, and the Refugee Foundation. Two years ago, I stopped doing that to invest money directly into African entrepreneurs. It is a breakthrough that you can do that so easily from your lazy chair.

ANETTE UWERA

Krispijn Beek is one of the 17,000 investors of MYC4 across 100 countries. Together, they transferred 10.6 million euros. Beek invested in 70 companies, usually the minimum amount of 5 euros a time, to spread his potential and avoid risk.

KRISPIJN BEEK

I invested in Bijouterie De La Ville for a couple of reasons. First, I thought the entrepreneur had a very unique story; he was living in Congo for 12 years and moved to Rwanda. These are two countries that, if I hear about them, it is mostly about civil war or misery. I find it very admirable that someone still starts a business there, especially in the precious metals and jewelry sector.

ANETTE UWERA

The money does not go to Kivuye directly. Mr. Ocheng is a local delegate for MYC4.

OCHENG PETER PATEL [Rwanda Microfinance Limited]

With the availability of an efficient delivery system like MYC4, more people will access funding in Rwanda, and will help us alleviate poverty, which is the major objective or vision of MYC4.

ANETTE UWERA

There are also other interests.

KRISPIJN BEEK

If you take stock, I'm not doing very well because I'm on minus 25 percent of return because a lot of people are not paying back anymore. This is a loss right now, and that is okay for an initial period, but eventually it has to give a positive return, of course. I am happy with my investment in La Bijouterie. He almost paid back everything, if I'm correct.

KIVUYE YAHA

Thanks to the money I received from MYC4, I can realize my future plans. I can buy more raw materials and reach more customers.

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