Frequently asked questions

Frequently asked questions

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.

How should I incorporate my investments in my tax report?

The money you invest via our platform should be taken into account in box 3 for private investors.

For business accounts, the return is charged with company tax.

What is the minimum and maximum amount I can invest at Lendahand?

Minimum

At Lendahand you can invest for as little as EUR 50. This amount can be increased in increments of 50.  

Maximum

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. 

Choose a project

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) Chambers of Commerce copy, the statutes of the company and IDs of shareholders with more than 25% stake.

Create business account

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?

When investing via a local partner, this financial institution is the borrower or counterparty. If you decide to invest in a company directly, this company is the borrower or counterparty. With direct investments, all pertinent information can be found on the borrower's project page. Information on investing via a local partner can be found on the local partner page.

Is it possible to invest directly in companies?

Yes. Generally, direct investments come with more risks than investing via local partners. This is because local partners spread their risks: they have many customers, different regions, are active in various sectors, and their projects have different maturities. A single company has a more concentrated risk: it is often engaged in only one industry and offers limited products. As the risk of direct investments is generally higher than an investment through a local partner, the interest is also higher: on average 5-8% annually.

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 info@lendahand.com 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.

In which currency can I invest?

At Lendahand you invest in euros. You pay in euros and get repaid in euros. The risks of currency fluctuations are carried by our local partners

What if I want to cancel my investment?

You can cancel your investment by sending an email to info@lendahand.com within 24 hours after you have received the confirmation email of your investment. The money will then be put on your wallet, and you can either leave it there or transfer it to your bank account.

Can I also invest if I am Belgian?

Yes, you can! Investing works the same as in The Netherlands. However, there are 2 Belgian laws that have to be considered: the prospectus law and the crowdfunding law. Please take note of the content of these laws.

Prospectus law

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.

Crowdfunding law

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.

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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?

Yes. In some cases, the company can choose to pay back the invested money before the scheduled date. For example, if the business has been growing faster than expected and they want to pay off their debt. When an investment is repaid early, you will receive the remaining amount together with the accrued interest. You will also receive a 1.5% interest on the early payment. Early repayments are not possible within the first 12 months of the project.

When do I start receiving interest?

Once a project is fully funded, the money from all investments will be transferred to the company on the first day of the following month. You will start accruing interest as of that day.

When do I receive my repayments?

Repayment periods are every 6 months, so you will usually receive money in your account around the 10th working day of the month every 7th month. For example, if you invested in a project that was fully funded on the 30th of January, you would receive your first repayment around the 10th of August.

How can I change my bank account number?

You can change your bank account via your ‘My Lendahand’. Choose 'Change bank account' and upload a copy of the new account’s bank statement, or transfer €0,01 from the new bank account to your wallet. You will receive a confirmation email confirming your change was successful.

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.

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 info@lendahand.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?

Lendahand works with Intersolve EGI: a Dutch financial institution specializing in payment settlement and electronic money. To be able to offer these financial services, Intersolve EGI must comply with the applicable financial legislation. Intersolve EGI is therefore supervised by De Nederlandsche Bank (DNB) and the Netherlands Authority for the Financial Markets (AFM) and owns a license to act as an Electronic Money Institution (and therefore also has a license as a Payment Institution). Your money will be deposited on a protected and secure bank account until the project you have invested in has been fully funded. Intersolve has no access to these funds. Once the project is fully funded, the money is transferred to the local partner or company in question.

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?

As part of the AFM license for investment firms, it is required that operational activities carried out by Lendahand (maintaining the website, contracting of local partners, legal issues, etc.) are strictly separated from financial transactions (payments made through the website). Intersolve takes care of the costs. This collaboration offers you more security since your money is placed on a protected bank account immediately after making your payment.

What happens when a local partner goes bankrupt?

When a local partner goes bankrupt, there’s a chance you’ll lose (part of) your money. Lendahand will try to recover outstanding payments, but the success rate is limited in such situations. For you, as an investor, there’s no possibility of taking action against the financial institution. Therefore, it is recommendable to choose several different projects.

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:

- Share our values and mission;

- At least three years of profitability;

- Able to generate income to repeat the investment;

- Compliant with legal requirements such as the payment of required taxes and permits;

- Free of any legal process involving non-payment, non-compliance with legal contracts or involvement in illegal activities;

- Verifiable experience in debt servicing (no past due fundings with any private or government lending institutions or banks);

- Socially relevant: the business offers clear and solid benefit to it's stakeholders, such as: employment generation, care for labourers and other workers, payment of wages and taxes, adherence to principles of fair trade, care for the environment, concern for the community at large.

Our local partners will never finance the following projects:

- Projects that cause harm to people and the environment;

- Projects that are illegal and immoral;

- Projects that exploit and/or employ children younger than 16 years of age.

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.

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About local partners

Who are the local partners of Lendahand?

These are so called NBFI's, Non-Bank Financial Institutions: financial entities without a banking license that provide financial services while under the supervision of local or national supervisory institutions.

Local partner overview

Which criteria do local partners have to meet to cooperate with Lendahand?

Every local partner must hold to our social mission and work with us to supply loans as cheap as possible. This ensures that local entrepreneurs have access to affordable financing which allows them to grow their business. A local partner must also have a 'track record'; they must have proven themselves as mesocredit provider for SMEs. This means for instance a solid credit portfolio and enough buffers and equity to compensate for unexpected downturns. We also check the organizational structure of the partner and how robust their (internal) procedures are. Finally, the loans that a local partner receives via Lendahand must be in proportion to the total balance of that partner. A healthy balance between effectuating influence and being independent is crucial. If you would like to receive more information on the financial indicators that we employ, please contact us via info@lendahand.com.

Are these local partners commercial companies or social enterprises?

One of the most important criteria Lendahand has with regards to local partners is that they must have a social mission. When commercial purposes are of main importance an institution will not be considered for a partnership with Lendahand.

Do local partners investigate social impact of the provided loans?

Yes. Even though research on the impact of loans is very time consuming, our local partners execute impact studies. Apart from that we ask all our partners to enter the expected impact when uplaoding a new loan request. Finally, Lendahand also executes their own research on the impact of loans.

See impact

Do your local partners use pre-funding?

Yes, usually the local partner pre-funds the loan. That way the company has access to the money before the loan amount is raised on our platform. This is important since many small companies request a loan when they need the money on short notice. For instance, they receive a large order and need to hire more people. Obtaining a loan through crowdfunding takes some time and that is why our local partners pre-fund the loan.

Until now all offered projects have been fully funded. However, it is possible that a project has been pre-funded already 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.

About Lendahand

What is the impact of Lendahand?

It's our mission to create new jobs at companies in developing countries and to facilitate families in gaining access to basic needs. This is our way of fighting poverty. To do this it's important to keep track of the results. That's why we have a separate impact page on our website.

See impact

What is the remuneration policy of Lendahand?

Lendahand has a payment policy based on the Law remuneration policies of financial undertakings. The policy applies to all employees of Lendahand and aims to ensure that rewards do not result in undesirable risks or behaviour with regards to the specific services for affiliates and or regarding the soundness 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 58,000 euros gross per year (2019).

We do not work with guaranteed variable remuneration.

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 policy The remuneration policy shall be reviewed at least once a year to determine whether the policy meets the requirements of the management, the applicable laws and regulations and the interests of the investors. The types of remuneration that can encourage undesirable behaviour will be examined as well as how the remuneration policy provides for appropriate action. If necessary, the assessment can be done more often.

Why Lendahand?

Lendahand was founded in 2012. Creating new jobs for companies in emerging countries and enabling people to improve their access to basic needs is our mission. This way we want to alleviate poverty.

Also, Lendahand contributes to the following Sustainable Development Goals of the UN:

1 no poverty

2 zero hunger

6 clean water and sanitation

7 affordable and clean energy

8 decent work and economic growth

By 2030, extreme poverty should be eliminated.

In which countries does Lendahand provide loans?

For example in Colombia, Mexico, Nicaragua, Zambia, Indonesia, Uganda, Mozambique, Georgia, Mongolia, India and Kenya. Every year we add a few countries to our portfolio.

What is the competitive advantage of Lendahand?

Lendahand is simply the only crowdfunding platform where you can invest in SMEs in upcoming economies and/or in sustainable initiatives at an interest rate between 3-6% 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?

To make investments via Lendahand possible debt instruments like bonds are issued to the crowd (also called lenders or investors). The provider of the debt instruments to the crowd 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 get access to 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 is able to select one or more projects (propositions) that he/she can finance by purchasing bonds (or similar instruments) worth 50 euro 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 proposition is financed fully, the condition precedent is met and the bonds are issued to the investors who have registered to the respective proposition. There are no emption rights with regards to investments in propositions. 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?

Complaints can be sent by e-mail (info@lendahand.com) and are typically answered in one (1) workday. They can also be addressed by phone (+ 31 10 717 18 15). Lendahand will address all complaints with the utmost urgency and take any appropriate measures to (re)assure our funders. All follow-up communications will be done via e-mail, using the e-mail address that is saved in our system unless otherwise indicated. This is done to insure that there is a reproducible digital archive of communications. Complaints are reviewed in accordance with Dutch law as well as our Terms and Conditions.

As a licensed investment firm, Lendahand is also member of KiFiD, a Dutch foundation with it's main purpose to handle complaints within the financial services industry. If Lendahand is not able to solve the complaint, KiFiD will advice and Lendahand will have to follow the advice given.

How can I unsubscribe?

If you want to stop investing via Lendahand and unsubscribe at our platform, you can send an e-mail to:  info@lendahand.com. After the last payment at your bankaccount, your account will be deactivated.  

About creating an account

Why do I need to provide an ID?

We are legally required because of the Law for preventing money laundering and financing of terrorism (Wwft).

Which documents do I need to provide

Personal account:

1. Identification document

You need to upload a clear picture of your passport, EU ID card or EU drivers license, which hold all personal information

Business account

1. Identification documents co-owners. For every person in your company which has more than 25% ownership an ID is necessary. For Foundations and Associations, all board of directors need to provide an ID.

2. Abstract of Chamber of Commerce

The abstract cannot be older than 3 months.

What should I keep in mind when uploading my ID?

Please use a valid passport, drivers license or identity card. Also, for uploading use a jpeg or jpg file (not a pdf). Besides that, if you make a scan of your ID with your mobile phone, please make sure there is not too much light on the scan.