- In possession of an Investment Firm License since 2016
- In possession of a European Crowdfunding Service Provider License since 2022
Since 2016, Lendahand has had an Investment Firm License (MiFID). Investing in crowdfunding projects through the Lendahand platform is thus an activity regulated by the Financial Markets Authority (AFM). Furthermore, Lendahand meets the minimum capital licensing requirement of EUR 125,000, as set by De Nederlandsche Bank (DNB).
In August 2022, Lendahand was the first Dutch crowdfunding platform to obtain the new European Crowdfunding Service Provider License from the AFM. The European Crowdfunding Regulation has applied since November 10th of, 2021. This regulation provides a European framework for exercising (certain forms of) crowdfunding services. After an intensive application process, Lendahand obtained the license allowing it to exercise its services in Europe.
Before licensing (for both licenses), all board members at Lendahand were tested for suitability and reliability by the AFM. They are assessed based on resumes, experience, education, aptitude, and references. Along this, Lendahand’s activities are screened for integrity and the control of business operations. Also, administrative measures such as supervisory and organizational oversight have been assessed as positive.
Investors can invest in the projects offered through the Lendahand crowdfunding platform. The investments either come to the borrowers as a loan or as debt instruments, such as bonds (notes) issued by the borrowers. In many cases, the borrowers are local partners, also known as financial institutions, who use the capital raised to finance small and medium-sized enterprises (SMEs) in emerging markets. In some cases, companies directly raise capital through the crowdfunding platform. These companies are most of the time active in the renewable energy sector. Read here how Lendahand selects borrowers for the platform.
The crowd of investors can select one or more projects they want to finance. Once the payment of the investor’s investment is successful and under the condition precedent that the project will meet enough registrations, the purchase agreement is established. In this structure, the bonds of the issuers become inserted and held in the concerned deposit. These pieces qualify as SFA-conform-kept financial instruments which have been separated from the assets of Lendahand and therefore are protected as such. The issued bonds by the crowd are permanently excluded from a possible bankruptcy of Hands-on BV (which carries the brand name Lendahand). When financing a project through an "ordinary" loan, Lendahand keeps records of who invested and for what amount so that it is clear at all times how and by whom the project was financed. The offerings of the issuers themselves are not supervised by the AFM. However, one of the requirements of the European Crowdfunding Regulation is that with every project, a Key Investment Information Sheet is published, together with a risk classification. It should also be clear how the interest rate was established.
Separation of funds
The licenses require Lendahand to strictly separate operational activities (such as website support, contracting local partners, legal issues, and more) from financial transactions (payments via the website). Lendahand, therefore, works with Intersolve Payments BV (Intersolve), a Dutch financial institution specializing in payment traffic settlement and electronic money, a so-called Electronic Money Institution. To be able to offer these financial services, Intersolve must comply with the applicable financial legislation. Intersolve is therefore supervised by De Nederlandsche Bank (DNB) and the Dutch Authority for Financial Markets (AFM) and has a license to act as an Electronic Money Institution (and therefore also has a license as a Payment Institution). The money investors provide to a project is deposited in a protected and secure bank account until the project has been fully funded. Intersolve has in no way access to these funds. Once the project is fully funded, the money is transferred to the borrower.