A New Director: What Does This Mean for You as an Investor?

As you may have heard, there is a change of leadership happening at Lendahand. After 11 years of dedication, hard work, and probably a few tears, Koen The has decided it is time for a new chapter in his life. Now, the honor and responsibility fall to me to protect and further develop this wonderful platform alongside the Lendahand team and you (the investors).

In this article, I will briefly introduce myself and answer what this leadership change means for Lendahand and especially for you as an investor.

 

I am Arno Hoogenhuizen, 40 years old, with a lovely girlfriend and two daughters aged 7 and 14, and in my free time, I enjoy playing tennis. My great 'work passion' is product improvement. I find it incredibly enjoyable to work with a team of enthusiastic people (my colleagues at Lendahand) to create something that has a positive impact on the lives of entrepreneurs in developing countries and, hopefully also, on yours as an investor. That's why I started as Chief Product and Technology in 2022, a role I concluded with the launch of Auto-Invest.

Today, I focus on your position as an investor. I believe that as a Lendahand investor, you should be able to see and feel that the money you invest is well-spent and that you should be able to trust in a net positive return. If Lendahand succeeds in making every investor a satisfied one, we can help more entrepreneurs in developing countries achieve a better life.

 

What Does This Renewed Focus on the Investor Look Like?

1. Fewer Payment Delays

Investors who have been with us for a while have noticed that there are too many payment delays. Specifically, the so-called direct projects have not performed well. These projects were very popular due to their positive impact (often climate-related) and high interest rates.

Due to poor performance last year, we stopped offering projects where you invest directly in a company without the involvement of a local financial institution. We had to conclude that the risk was simply too great. At the same time, these projects have a significant positive impact on people and the planet. Therefore, we want to offer these projects again but with fewer risks.

What are the solutions? For example, through collaborations with partners like Triodos or with a guarantee for investors. These solutions may offer lower interest rates, but the risk is much lower, and the positive impact remains unchanged.

While we work on this, you will primarily find projects from (micro)finance institutions on our website. Lendahand has been offering such projects since day one. Historically, these projects have a write-off rate of less than 0.5%. A very acceptable risk. The impact is not diminished: in the past 11 years, we have improved over 1 million lives through these types of projects.

 

2. Higher Interest Rates

The interest rates on our projects have significantly increased in recent years: you now receive up to 8% annually. This is good news for you as an investor. But is it also good news for the borrowers? At Lendahand, we strive to keep the interest rates for borrowers as low as possible. However, we cannot ignore the international interest rate market. If Lendahand doesn't slightly increase the interest rates, too many investors will stay away, and we won't be able to help entrepreneurs in developing countries. It's up to us to find the right balance between risks, interest rates, and impact.

 

3. Better Insight into Risk

Earlier this year, we introduced an improved and more visible credit score. We rate the risk of a project on a scale from A+ to E. Since the end of 2023, Lendahand has only offered projects with a credit score of A+, A, B+, or B. As a result, the risk profile of our offerings has significantly improved overall.

 

4. Easier Investing

A good investor at Lendahand ensures their portfolio is diversified across multiple projects. Finding these projects is enjoyable, and the direct connection provides a positive feeling. But it also takes time. That's why we introduced Auto-Invest this year. You set your project preferences, and Auto-Invest does the rest. We will make further improvements this year, including the ability to transfer a fixed monthly amount from your bank account to your Lendahand wallet, after which Auto-Invest will automatically invest the money for you.

 

5. Fewer Periods Without Interest

You earn interest on your money during the term of a loan. Before a project starts and after it is completed, your money is always tied up for a few days (and sometimes weeks) without earning interest. We want to change that.

This month, we are testing an early repayment system for the first time. Normally, you receive your repayments in the middle of the month. We will now try to make repayments at the end of the first week. For repayments where this is not possible (and it will still happen occasionally), we will do a second round in the middle of the month.

In an ideal world, we want a project to start on the day it is fully funded. We will work on this, but it is more challenging than it seems. Don't expect this to be implemented this year, but know we are working on it.

 

6. Better Insight into Your Euro and Dollar Loans

You can invest in euro and dollar loans at Lendahand. If you have investments in both types of loans, your financial dashboard does not currently provide a clear overview of your total outstanding loans. We will address this later this month by showing the total of all your outstanding loans by default. The outstanding dollar loans will be converted to euros at the current exchange rate.

 

The Company Lendahand

This year, Lendahand will likely surpass the €200 million investment mark. I hope that in 10 years, we can reach €1 billion together. For that, it is essential that Lendahand is a stable company, and for that, it is important that Lendahand makes (some) profit.

Lendahand is a (social) commercial company. We must stand on our own feet. To achieve this, we have received help from a group of investors led by the ABN AMRO Sustainable Impact Fund. Thanks to their investment, we are taking steps that bring us closer to this goal.

It is now up to the investors, the Lendahand team, and me to take the final step. Not so much for Lendahand, but especially for the more than 1 million lives that you and we have positively impacted and the millions of lives we still want to improve together.

 

As the director of Lendahand, I now join the crowd. Therefore, I would like to share my email address with you: [email protected]. If you have a question or a good idea that you think the director of Lendahand should know about, I would love to hear it. Really, do it!

Together, we invest in a fairer world!

Regards,

Arno