Entrepreneur Financial Centre 16
With EUR 300,000 the 150 members of the One heart group will acquire the land on which they operate and save the cost of renting premises, purchase a brick making machine to increase production efficiency and employ more labourers.
- Local partner investment
- 50 new jobs
- 250 people reached
EFC Uganda Limited (MDI) is a licensed Microfinance Deposit-taking Institution in Uganda. It was created in 2011 by Développement Desjardins International to provide access to financial services for the underserved SME market segment. The company operates in Kampala with a head office, two branches and five business service centers. EFC Uganda is supervised by the Bank of Uganda and has several reputable shareholders.
Shem Kakembo is the Managing Director since early 2018. Prior to joining EFC Uganda, Shem worked in leading management positions in financial industry in Uganda and Rwanda since 2003. His latest apointment prior to joining was as Head of Personal Markets (Retail) at Stanbic Bank (Uganda’s largest bank).
One heart investment group is a group of 150 former construction site laboures (porters and masons) who 5 years ago decided to come together to produce construction materials and supply to the various construction sites that they previously worked. There major driver was to become self-employed and secure their future since manual labourers tended to be rejected as they grew older.
With this loan of EUR 300,000, the 150 members of the ‘One heart group’ will acquire the land on which they operate and save the cost of renting premises, purchase a brick making machine to increase production efficiency and employ more labourers.
One heart investment group has been in existence for 5 years and formally registered their association in 2019 after being advised that it’s a requirement for them to access borrowing and they opened their account with Efc Uganda limited which they prefer to be their financier.
Today, the Association has a total of 150 members and is projected to grow to over 300 Members by end of 2021. All these members are self-employed by the one heart investment group and profit is shared equally among them. Key decisions are arrived at by voting using the ‘one man one vote’ principle. To join, members apply and pay a one-off membership fee and are required to have been labourers at a construction site.
The objective of the association is to promote mutual economic interest of its members and improve members’ lively hood through strengthening members income base and promoting self-employment.
Members shall consist of;
- Members who do technical work and those that do casual work, but they all undergo the same registration procedures, and they all follow the same group constitution
The Association management is responsible for marketing of the ready products and this has been success full because there is always ready market for the products given the construction boom currently happening in Uganda. This is a strong point to note in that production and sales can be tracked for payments and monitoring since they are the ones producing and supplying to end users.
This proposal is backed up by the fact that;
The Construction and building sector is on a peak currently in the country and building material which these people deals in specifically don’t face price fluctuation as it is in other products.
EFC projects that this association will grow stronger in the years to come, increasing its membership and revenues.
|Company name||Entrepreneur Financial Centre 16|
|Sector||Manufacturing / Production|
Impact of this project
- With this investment 50 jobs are created
- With this investment 250 people are reached
About the risks
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 scenario's the local partner is contractually obliged to comply with these demands.
Lendahand will always conduct due diligence when companies request funding. To provide more insights on risks, an independent party comes in to perform an analysis of direct loans. The results can be downloaded on the project detail page of the direct loan. However, this analysis serves primarily as a tool for your own opinion and conclusion. Pay attention to the fact 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 of EUR 125,000 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 EFC Uganda
|Equity / total assets||31.00%|
|Write-off ratio last 12 months||4.10%|
|% investment amount in arrears (>90 days)||1.60%|