About investing in a project
What does it cost to invest via Lendahand?
There are no costs associated with joining our platform or investing, whether you pay via iDeal or credit card. The repayment process is also free of charge.
How can I pay?
You can pay with iDeal (available for Dutch bank account holders), credit card (VISA and Mastercard), and Bancontact (available for Belgian bank account holders.) No fees are applied.
What is the minimum and maximum amount I can invest at Lendahand?
At Lendahand you can invest for as little as EUR 50. This amount can be increased in increments of 50.
Lendahand recommends that you only invest amounts that you can responsibly justify (AFM advises not to invest more in crowdfunding than 10% of funds available). Furthermore, we strongly discourage funders from investing with borrowed money.
Is it possible to open a business account?
Yes. When creating an account, select either a 'private' or 'business' account. You will need to supply a (recent) Chamber of Commerce copy, the company’s statutes, and shareholders’ IDs with more than a 25% stake.
What communication do I receive when I invest in a project?
The legal terms for the investment are part of the terms and conditions. You will always get a confirmation email. Additionally, you will receive an email when the project is fully funded. You can also download the obtained notes per project in My Lendahand.
What if a project does not get funded?
If a crowdfunding project does not deliver the required amount within 60 days, your committed investment will be returned. So far Lendahand has a 100% funding rate.
Who is the counterparty when I make an investment?
Is it possible to invest directly in companies?
From which countries can I invest in projects via Lendahand?
You can invest if you have an EU Identification document. If you are from outside the EU, please send an email to firstname.lastname@example.org and we will assist you further.
please note: in some countries certain legal requirements may apply to Investors. It is your responsibility to ensure that such requirements are met.
What is the difference between loans and notes?
In which currency can I invest?
At the moment Lendahand offers investments in euros (EUR) and U.S. dollars (USD).
The following applies for euro investments: you pay in euros and are repaid in euros. The risks of exchange rate fluctuations are covered by our local partners and/or entrepreneurs.
For US dollar investments: you also pay in euros and are repaid in euros. However, after a project is fully funded, on the first business day of the next month, the total amount in EUR from the project will be converted to USD at the exchange rate previously set by IbanFirst, our exchange rate partner. Repayments are then converted back from USD to EUR on the repayment day. Find more information on our currency page.
What if I want to cancel my investment?
Can I also invest if I am Belgian?
The offering of the notes is exempt from the obligation to publish a prospectus in accordance with Article 7 §1, 2° of the Belgian Act of 11 July 2018 on the public offering of investment instruments and the admission to trading of investment instruments to a regulated market. Furthermore, in accordance with Article 11 of the same Belgian Act of 11 July 2018, Lendahand is required to publish an information note. This information note is equally not issued under the control of and will not be approved by the Belgian Autoriteit voor Financiële Diensten en Markten/ Authorité des services et marchés financiers. You will find a specific information note in relation to each project on the project detail page.
In accordance with Article 30§1 of the Belgian Act of 18 December 2016 regulating the recognition and definition of crowdfunding, Lendahand, as a regulated investment firm under supervision of Dutch AFM, is authorised to provide alternative funding services in Belgium.
What is Impact+?
Impact+ is a private investing product for investors who want to invest amounts of € 25,000 or more in our projects. It offers investors the convenience of investing with impact without hassle. With Impact+, Lendahand will handle the investments for you, without additional costs. Visit the Impact + page for more information.
About (re)payments and interest
How much interest do I receive?
The annual interest rate on investments varies from 2-8%, depending on the type of investment.
How do I transfer the proceeds to my bank account?
Everyone who invests via Lendahand has a personal account: My Lendahand. Repayments, including interest, are transferred to this account every six months. You can choose to reinvest your repayments or have them transferred to your bank account at no extra cost. Want to change your wallet settings? Go to Settings
How is the interest being calculated?
Your investments are paid back in equal amounts on a semi-annual basis. For instance, an investment with a maturity of 12 months will be repaid in two parts. You’ll receive payments after 6 and 12 months, including interest. In the next example, we’ll show how principal and interest payments are calculated.
Suppose you invest € 1,000 in project A which is interest-bearing as of 1 January 2020. The loan has a maturity of 12 months and pays an annualized interest rate of 3%.
- On 30 June 2020, you will receive the first repayment of € 500 as well as an interest payment of 3% over € 1,000 for that 6 month period (€ 15). The total amount for thefirst period is € 515
- On 31 December 2020, you will receive the second repayment of € 500, as well as an interest payment of 3% over the outstanding notional of (€ 1,000 - € 500) for that 6 month period (€ 7.50). The total payment for the second period is € 507.50
Are the interest rates the effective yearly interest rates?
Yes. The effective interest rates at Lendahand varies between 2-8% on an annual basis and are paid on the notional amount that is sent to the company. No interest is paid on amounts that have been repaid to the investor.
What is the maturity of the loans Lendahand offers?
Anywhere from 6 to 48 months in 6 month intervals.
Are companies allowed to repay the investments early?
When do I start receiving interest?
When do I receive my repayments?
How can I change my bank account number?
What procedure is there in case of restructuring and/or the default of an investee?
- In case of payments in arrear, a new payment schedule is drawn up (with or without other creditors) together with the investee. We also call this restructuring. In such situations, the interest that should be paid back in any month is in principle deposited into your wallet. For the notional amount, the following principle counts: the longest outstanding amounts will be repaid first. The new payment schedule will also be integrated into your My Lendahand environment.
- When an investee indicates that it is no longer able to meet its payment obligation, all investors become competing creditors, and should there be any return of funds, these are distributed pro-rata among those investors. In your My Lendahand environment the concerning projects are placed under Written-off investments.
What are the risks of investing money?
The risk level depends on the specific project. Local partners cover the risk of currency exchange rates and defaults on Local Partner investments. They do this by maintaining financial reserves for this purpose. Aside from that, there is an option to claim their equity if needed. While these measures are intended to minimize the risk to investors, our local partners face risks of their own that could affect their ability to secure your investment. These include - bankruptcy - currency exchange rates - fraud - operational risks - political and regulatory changes - natural disasters or epidemics.
With direct investments, risks of default are not covered. As the risks are higher, so are the interest rates.
There is also some operational risk at Lendahand. An example might be that Lendahand is unable to find shareholders to finance their activities. In such a case, Lendahand will handle outstanding investments at the best of its ability. At the same time, our ability to legally address non-payment from local partners becomes understandably difficult.
How does Lendahand minimize the risks?
Every local partner must share our social mission to ensure local entrepreneurs can access affordable financing, allowing them to grow their business. Local partners must also have a 'track record'; they must have proven themselves as a reliable credit provider for SMEs.
For instance, this means a solid credit portfolio and enough buffers and equity to compensate for unexpected downturns. We also check the organizational structure of the portfolio company and how robust their (internal) procedures are. Finally, the investments must be in proportion to the total balance of that portfolio company. A healthy balance between effectuating influence and being independent is crucial. If you would like to receive more information on the financial indicators we employ, please contact us via email@example.com.
When currency exchange risks become too high for a local partner, Lendahand will urge the local partner to cover these risks. In some scenarios, the local partner is contractually obliged to comply with these demands.
Lendahand always conducts due diligence when companies request funding. The results can be downloaded on the project detail page. However, this analysis is not investing advice.
Does Lendahand provide a guarantee?
Usually we don't. Local partners take care of the repayment, even if (some) entrepreneurs are unable to do so themselves. If the local partner is for some reason unable to repay then there is a chance of partial or full loss of your money. For this reason, Lendahand only selects financially solid partners based on strict criteria.
For most direct investments, there is no guarantee. However, currency risks are covered.
Sometimes, and only for some direct investments in Africa, our partner Sida, part of the Swedish government, will guarantee a maximum of 50%. Read here more about guarantees with Sida. Projects with Sida guarantees are indicated explicitly on the project page.
Does Lendahand have a license or exemption?
Yes. The Dutch Authority Financial Markets (AFM) has provided Hands-on B.V. (with trade name 'Lendahand') in September 2016 with an investment firm license in accordance with article 2:96 of the Financial Markets Supervision Act (Wft). Placing orders on Lendahand's website is therefore an AFM regulated activity. Lendahand also meets its minimum capital requirements following its license as required by De Nederlandsche Bank (DNB).
Lendahand uses an exemption from an approved prospectus that is available up to EUR 5 Million per year.
How safe are my personal details?
We adhere to strict safety requirements concerning private and payment details. All sensitive data is sent through an encrypted connection (https). Also, information is stored (encrypted) in a secured facility provided by AWS: the world’s largest hosting service. A secured connection and multi-factor authentication can only retrieve customer documents.
What happens if the local currency devaluates?
Our local partners and companies bear the exchange rate risks. We settle the investments, redemptions, and interest payments in euro.
Does Lendahand use a third foundation fund?
What happens with my money if Lendahand goes bankrupt?
If Hands-On BV (containing the brand name Lendahand) went bankrupt, trades between Lendahand and payment service provider Intersolve EGI would cease immediately. Intersolve will then transfer the funds in your wallet to your bank account (Note: if at this time the project you have invested in has been fully funded and the money has thus been transferred to the local partner, these funds will not be transferred back to your bank account). Intersolve will then, in consultation with a trustee, handle all repayments between the investors and entrepreneurs until the final repayment of the last project has taken place.
Additionally, Lendahand is part of the investor compensation scheme (ICS). This scheme aims to compensate individuals and small businesses with trusted money and or financial instruments (such as notes or options) to a licensed bank, an investment firm, or a financial institution. In case the financial firm is unable to meet its obligations arising from claims related to the investment service (in other words, if Hands-On BV is not keeping track of the acquired notes by investors in the Wge depot correctly). The ICS guarantees an amount of up to €20.000 per individual. For more information, go to www.toezicht.dnb.nl/en/2/50-202210
Why is Intersolve EGI handling my money?
What happens when a local partner goes bankrupt?
About entrepreneurs requesting a loan
What interest rate do entrepreneurs pay?
We want to be the cheapest alternative for the companies that need funding. Providing mesocredits to entrepreneurs in often rural areas is a very labour intense process. It is comparable with the cost structure of microcredits. A huge number of loans with a relatively small size puts quite some administrative pressure on local partners. Also, these loans have to be monitored and obviously repayments have to be collected at the right time at the right place. Furthermore, partners have to pay local taxes and they have to take a provision at their balance sheet for possible non-repayments.
Since our SMEs do not have access to micro credits or bank loans, they often need to borrow from 'loan sharks' that may charge more than 100% interest per year. Even if they had access to micro credits, they would still be paying 30-50% annually. According to the New York Times (2010), the global average interest rate for microfinance loans is 37%.
On average, our SMEs pay around 1-3% interest per month. Lendahand will launch new propositions structurally for which the central theme is lowering the interest entrepreneurs have to pay.
Which criteria should entrepreneurs have to meet?
Our local partners screen applicants thoroughly. The potential client must be or have:
Our local partners will never finance the following projects:
What kind entrepreneurs can ask for a investment via a local partner?
Small and medium sized enterprises, 2-100 employees, in the area of farming, retail, wholesale, production or services. Applicants should have a 'moral compass' and have to prove they want the best for the enterprise, people, the community and the environment.
About local partners
Who are the local partners of Lendahand?
Our local partners are so-called NBFI's, Non-Bank Financial Institutions. These are financial entities without a banking license that provides financial services while under regional or national supervisory institutions’ supervision.Local partner overview
Which criteria do local partners have to meet to cooperate with Lendahand?
Every local partner must share our social mission to ensure local entrepreneurs can access affordable financing, allowing them to grow their business. A local partner must also have a 'track record'; they must have proven themselves as a reliable credit provider for SMEs. For instance, this means a solid credit portfolio and enough buffers and equity to compensate for unexpected downturns. We also check the organizational structure of the company and how robust their (internal) procedures are. Finally, the investments must be in proportion to the total balance of that company. A healthy balance between effectuating influence and being independent is crucial. If you would like to receive more information on the financial indicators we employ, please contact us via firstname.lastname@example.org.
Are these local partners commercial companies or social enterprises?
One of the essential criteria Lendahand has regarding local partners is that they must have a social mission. If commercial gains are prioritized at the expense of social impact, an institution will not be considered for a partnership with Lendahand.
Do local partners investigate social impact?
Yes. Even though research on our investments’ impact is very time consuming and expensive, our local partners execute impact studies where they can. We also ask our partners to give an estimate of the expected effects when uploading a new request.See impact
Do your local partners pre-fund projects?
Yes. We believe this is important because many small companies need the money on short notice. For example when the company receives a large order and needs to hire more people. Lendahand has a 100% funding rate, however it is possible that a project has been pre-funded by the local partner but does not get fully funded on the Lendahand website. In that case, the local partner will use alternative sources of funding for that specific project.
What is the impact of Lendahand?
Our mission is to fight poverty in emerging markets by investing in people and businesses. Our projects create new jobs in developing countries and enable families to gain access to basic needs.See impact
What is the remuneration policy of Lendahand?
Lendahand has a payment policy based on the Dutch Law remuneration policies of financial undertakings. The policy applies to all employees of Lendahand and is aimed at ensuring that employees rewards do not pose any undesirable risks and/or behaviour to the sustainability of Lendahand.
Remuneration Lendahand pays all employees a fixed monthly income, which is not dependent on targets. Employees do obtain options. The management of Lendahand earns an average income of EUR 65,000 gross per year (2021).
We do not work with guaranteed variable remuneration
The decision on remuneration policy
The remuneration policy is drawn up by the management. Because Lendahand is a relatively small enterprise a remuneration committee will not be set up. However, the remuneration policy is aligned with the Supervisory Board annually.
Adjusting policyThe remuneration policy shall be reviewed at least once a year to determine whether the policy meets management’s requirements, the applicable laws and regulations, and investors’ interests. The types of remuneration that can encourage undesirable behavior will be examined and how the remuneration policy provides for appropriate action. If necessary, the assessment can be done more often.
Lendahand creates new jobs in emerging markets and enables people to improve their access to basic needs. This way, we contribute to the UN’s following Sustainable Development Goals:
1 no poverty
2 zero hunger
6 clean water and sanitation
7 affordable and clean energy
8 decent work and economic growth
The Sustainable Development Goals (SDGs) were adopted by all United Nations in 2015 as a universal call to action to end poverty, protect the planet, and ensure that all people enjoy peace and prosperity by 2030.
In which countries is Lendahand active?
Colombia, Mexico, Nicaragua, Zambia, Indonesia, Uganda, Mozambique, Georgia, Moldova, Cameroon, South Africa, Mongolia, India, and Kenya, to name a few. Every year we add more countries to our portfolio, see our partner page.
What is the competitive advantage of Lendahand?
Lendahand is the only crowdfunding platform where you can invest in SMEs in upcoming economies and sustainable initiatives at an interest rate between 2-7% per year.
What is the business model of Lendahand?
Our borrowers (issuers) pay an average interest rate of 7,8% per year to Lendahand. Consequently we pay on average 4,25% interest to our funders. Our gross margin is around 3% (and maximized at 4%).
How does the legal structure of Lendahand work?
Possible debt instruments officially termed “Notes” are issued to the crowd (also called investors) when they want to invest via Lendahand. These notes are similar to bonds but cannot be resold.
The provider of the debt instruments to the public is called an ‘issuer.’ At Lendahand, these are either the financial institutions that finance the Small and Medium Enterprises (SMEs) in emerging countries, or entrepreneurs that raise capital on our platform themselves. Issuers only access the Lendahand website for projects when they comply with the admission requirement and quality standards beforehand. This includes the acceptance of the conditions for using the platform.
The crowd can select one or more projects (propositions) that he/she can finance by purchasing notes (or similar instruments) worth €50 each. Once the payment of the investor is successful, the purchase agreement is established. This agreement is entered under the condition precedent that the project (the proposition) will meet enough registrations. Investors accept the Terms and Conditions in which the purchase agreement takes part. Once the proposal is fully funded, the condition precedent is completed, and the notes are issued to the investors who have registered to the respective proposition. There are no exemption rights with regards to investments in requests. All investments are done via the website and are handled automatically and in order of entry.
What should I do if I have a complaint?
How can I delete my account?
About creating an account
Why do I need to provide an ID?
Which documents do I need to provide?
In case of a personal account:
You need to upload a clear picture of your passport, EU ID card, or EU driver’s license, which holds all personal information, as well as your citizen service number.
Please upload a JPG or JPEG, not a PDF. If you choose to upload a scan of your ID with your smartphone, make sure your scan does not have any glares. Also, we ask you to upload a picture of yourself or take a selfie with your smartphone.
In case of a Business account we also ask for
Why am I being redirected to Onfido during the identification process?
Why are you asking for a selfie/picture?
About USD investments
Is the investment process the same as with EUR projects?
Is the repayment process the same as with EUR projects?
Can I have a separate USD and EUR wallet in my Lendahand account?
Do I need to create another account or wallet to invest in USD projects?
How much interest do I receive?
Is there a difference in risks compared to EUR deals?
Do the local partners or iBanFirst hedge the currency fluctuation risks?
Most of our local partners hedge currency fluctuations against their local currency (in which they generate revenues and pay their expenses). Typically, Lendahand also agrees with the local partner the maximum amount of unhedged loans. With the USD loans, some companies will no longer have to hedge, as their local currencies are pegged to the US Dollar. This means they do not fluctuate against the USD (whereas they do fluctuate against the euro). iBanFirst could technically hedge the EUR-USD exchange rate up to two years, but this is something we currently do not offer.
What happens if the exchange rate goes down between the time I invest in a project and the time it gets fully funded? Will iBanFirst cover the exchange rate?
How do I know if I’m investing in a USD or EUR project?
At what point in time is the exchange rate determined?
What is the role of iBanFirst?
How will iBanFirst fix the conversion rate?
Do I always get paid back in euros?
Is the interest rate entrepreneurs pay different from EUR projects?
Is the competitive advantage of Lendahand the same as for EUR projects?
About local currency investments
Who is TCX?
Which exchange rate applies for investments in local currency?
Why would a portfolio company choose or not choose for funding in local currency?
What is the role of the Lendahand FX Foundation?
Why are currency risks covered for investments in local currency and not for investments in USD?
The fluctuation risk between dollar and euro is easier to oversee and estimate than the risk between the euro and the local currency of an emerging market. The interest rate differential between euro and dollar is typically more limited too. The operational costs to hedge the euro/dollar risk are significant. In contrast, the risk over the maturity (maximum of 3 years) of a dollar project on the platform is manageable and limited. Therefore, we think it is a responsible choice not to hedge that risk and an investor can decide for themselves if he/she is willing to take the euro/dollar risk.
In the case of unknown and volatile emerging market currencies, we find that it would be irresponsible to leave the currency exchange risk to the investor. Therefore, we offer entrepreneurs the choice between financing in EUR, USD, or their local currency. If the entrepreneur chooses local currency funding, we hedge the currency exchange risk with TCX.
What does the partnership between TCX and KfW mean?
Just like with EUR and/or USD investments on our platform, as an investor, you risk losing your deposit when an entrepreneur defaults. The intervention of TCX and KfW, the German development bank, does not minimize or eliminate this risk.
TCX hedges the exchange rate risk on the local currency projects to make sure potential fluctuations and depreciation in the entrepreneur’s local currency against the euro don;t result in losses for the investor or the entrepreneur. KfW minimizes the risk TCX takes by guaranteeing potential credit losses on the currency exchange in case an entrepreneur defaults. In case of a default the KfW will pay the credit loss on the currency exchange to TCX. To make this possible, KfW is financially supported by the German Ministry of Environment, BMU.
In which case would the currency hedge contract with TCX not be valid?
There are certain cases in which TCX has the right to end the currency hedge contract for a specific local currency loan. For example, in case:
- a payment due from Lendahand FX (LHFX) to TCX under the currency hedge contract, due to non-payment by the entrepreneur, cannot be paid by LHFX for more than 180 days, and the loan and currency hedge contract are not restructured within that period to eliminate the late payment.
- LHFX and/or Hands-on BV fails to comply with certain information requirements, particularly regarding the timing and amount of payments received from the entrepreneur.
- LHFX and/or Hands-on BV changes owners, and TCX, for whatever reason, does not want to continue the contract with the new owner.
- LHFX and/or Hands-on BV loses its relevant licenses and/or otherwise seriously fails in its obligations to regulators (AFM and DNB).
- TCX is no longer considered solvent based on the agreements made with TCX's shareholders, including the Dutch government, and must be liquidated in which case all of TCX's outstanding contracts will be settled.
If TCX terminates the currency hedge contract for any of these reasons, Lendahand converts the outstanding loan into a euro loan. From that moment on, the entrepreneur runs a currency risk, which indirectly leads to greater credit risk for you as an investor. This conversion takes place at the exchange rate at that time. Exchange rate fluctuations that affected the outstanding loan are thus made permanent. When the entrepreneur repays the euro loan, a settlement still takes place with TCX so that you as an investor receive exactly your deposit and the agreed interest.
What risks does an investor face on local currency financing?
As an investor on a local currency loan, just as with a euro loan or dollar loan, you basically run the entrepreneur's entire credit risk. If the entrepreneur cannot pay the interest and/or repayment owed by him, the investor will not receive the expected interest and/or repayment either. However, this credit risk is in principle lower than with a euro loan or dollar loan. Since the entrepreneur is not exposed to exchange rate risk on loan, there is less risk of not being able to repay the loan because of a drop in the local currency's value.
Investing in a local currency loan does not expose you to direct currency risk; you get the euros you invest paid back in euros, with the corresponding interest in euros, as long as the entrepreneur pays back his loan.
Suppose, however, that TCX terminates the currency hedge contract between the Lendahand FX Foundation and TCX for valid reasons. In that case, the outstanding amount of the loan will be converted into a euro loan at the exchange rate at that time. The entrepreneur will then be exposed to currency risk on the euro loan from that moment on, and in principle, that means more credit risk for the investor.
The currency hedge contract with TCX covers the currency risk for the entrepreneur and investor; therefore, if TCX cannot meet its obligations under that contract, it could result in a loss for you as an investor.