Results of the microcreditcompetition

In march this year I started a micro-credit competition in cooperation with the Young Economic Affairs Association. We have used the MyC4 platform for the competition. The goal of the competition was to determine the best social investor. A title which is earned by scoring both on financial results and on social results.

The financial results has been determined by the average rate of return, the social result by comparing the number of Millennium Development Goals per Euro invested.

The competition

The competition started with 25 participants, each investing between 20 and 50 Euro. In total the participants uploaded Euro 1.000,- to their accounts at MyC4. Part of that is still untouched on the accounts, because only 12 of the participants actually invested their money.

In total they invested Euro 518 in 56 African entrepreneurs. Three investors were able to use repayments to make a reinvestment during the competition.

Results

Best Financial Investor:

  1. 30604:   16,76%
  2. 30607:   16,67%
  3. 30598:   15,89%

Most Social Investor

  1. 30690:
    0,32 Millenium Development Goal per Euro
    Level MyC4 punten 5
  2. 30593:
    0,32 Millenium Development Goal per Euro
    Level MyC4 punten 4
  3. 30607:
    0,316 Millenium Development Goal per Euro

Best Social Investor

  1. 30607
    0,316 Millenium Development Goal per Euro
    Gemiddelde rente 16,67%
    Overall 43,21 punten
  2. 30610
    0,320 Millenium Development Goal per Euro
    Gemiddelde rente 13,96%
    Overall 37,92 punten
  3. 30604
    0,108 Millenium Development Goal per Euro
    Gemiddelde rente 16,76%
    Overall 36,88 punten

The winners of the micro-credit competition received their award today, amongst which the book Dead Aid by Dambisa Moyo and White men’s burden.

Lessons learned

The MyC4 platform is capable of hosting competitions, because investors can make their own decisions about the interest-rate they charge to entrepreneurs. The Dutch auction makes sure participants will be bid out if they bid to high.

In a competition it should be easy to see which investments your competitors have made, so you can try to bid a lower percentage to get them out of certain investments. I experimented with a to provide this service, but it didn’t work well. As not all bids became visable in the FriendFeed-room. This hindered the participant in getting a view on how their competitors were doing.

Administrating the competition has proven to be very time-consuming. Because MyC4 hasn’t got a API or a simple way to extract figures or recombine the biddings of the participants. So each participants has to be checked individually. MyC4 Watch has recently became a solution for the financial part of the competition, because they now have the possibility to request to update the information of a user.

The participants were dependent on my own overviews each month, but I missed the time to make that overview each month. A tool to automate that would be very handy. MyC4 Watch contains the basics for it, but I think an open API will be needed before those kind of tools will really take off.

Future thoughts

I think group competitions will be more interesting than individual competitions for the future. The group feature of Kiva is very interesting in that respect. It gives users to possibility to join groups and to compare their performance against other groups. On Kiva it’s only on number of entrepreneurs that are provided a loan and the amount invested. On MyC4 you could also compare groups on financial performance. That would give the possibility to organise competitions between organizations or groups of people.

For now I want to thank the Young EA board & the MyC4 staff for their cooperation & all the help I received the last year in setting the competition up. I will try to make all used resources available for other investors here on MyC4 in the coming months. And I’m curious your thoughts about running competitions on investing in Africa?

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