Kenya

Sistema.bio

A loan of EUR 150,000 will empower 360 families and turn their small farms into sustainable businesses with a biodigester.

  • Direct investment
  • 360 biogas digester systems installed
  • 10 new jobs
  • 2160 people reached

€150,000

Amount

12 months

Maturity

6.50%

Annual interest
100%
Fully funded in 5 days on 27 March 2018.
+ 253 other investors

Only available for tax residents of the Netherlands.

NB: ONLY TAX RESIDENTS OF THE NETHERLANDS ARE ALLOWED TO INVEST IN THIS OFFER

Basic info:

Issuer: Sistema.bio
Currency:  EUR 
Amount: 150,000
Maturity: 12 months, semi-annually and linearly amortizing 
Collateral: N.A.
Interest rate: 6.5% p.a. (normally 6% p.a.)

Summary

Sistema.bio is a Mexican social enterprise that has been operating since 2010. We manufacture, sell, distribute, install, and finance high-quality biodigesters as turnkey packages for small-scale farmers. Our mission is to create value from waste all around the world: renewable energy (biogas) and organic fertilizer.

The problem: smallholder farmers produce almost 80% of the worldwide food. However, they are also the population that faces important barriers such as climate change, soil degradation and lack of access to financial services to improve their lives. 

The solution: biodigesters and full wrap-around service allow farmers to benefit from what used to be a problem (manure) to transform it into renewable energy. The digester also is a waste management system and contributes to eliminating pollution spots and reducing greenhouse gases. In that way, farmers can cook without smoke, avoiding pulmonary diseases, and also increase the productivity of their farms with organic fertilizer.

Sistema.bio has a holistic approach to address poverty, food security, and climate change, we work through three axes: technology, capacity building and financing. This solution allows us to solve problems efficiently and end the circle of disadvantages that previously seemed impossible to break, to create a more sustainable, equitable and empathic world without waste. 

The project

Our goal is to ensure that our clients reap all the possible benefits from their Sistema.bio digester by ensuring long-term adoption and strong return on investment.

How do we do this? Our approach consists of 6 steps: https://goo.gl/fB12nX

With their loan, farmers can pay the system with the savings they are making in fertilizer, wood, charcoal or LP gas; allowing them to pay for the whole system and service within 9-10 months on average, maximizing their return on investment.

With a loan of EUR 150,000, Sistema.bio will be able to manufacture and export the equivalent of four large containers from our manufacturing plant in Mexico to our clients in Kenya. After the half-day installation provided by Sistema.bio, farmers will start displacing fossil fuels, powering their farms with renewable energy and increase their crop production with organic fertilizer. The loan will also boost our operations in Kenya where we have already created 32 jobs in the local communities.

The EUR 150,000 loan addresses the gap between the moment the biodigester is produced and the moment it is installed and paid by small farmers. Each euro we´re going to receive from Lendahand community will cover the cost of manufacturing, shipping and installing biodigesters ordered by our Kenyan clients. Once the biodigester is ready to be used, after an approximate 6-month cycle, our client pays it. Therefore, the euro lent by Lendahand to Sistema.bio is given back to the community.

Hannah’s story

Hannah is a smallholder farmer but she is also a wife, a mother of four and one of the first women at Ndiri-ini Village, in Kiambu County to increase her farm´s productivity and family well-being with a Sistema.bio Hybrid Reactor plant.

A year ago Hannah was spending 50 USD inexpensive fossil fuels and she was spending money in the health clinic because she developed chest problems resulting from the daily inhalation of smoke.

Hannah decided to invest in a Sistema.bio digester, now feels healthier, has enough energy to cook for her family at no cost, and saves the money that would otherwise be burnt off on wood fuels.

But the benefits of the system are not only in her health, now Hannah is generating and using her own fertilizer which has increased her farm productivity and has enabled an annual saving on fertilizer of at least 80 USD. She also sells the extra biofertilizer giving her a weekly extra income. With the cost savings, Hannah pays for her children’s education as well as reinvesting in her farm.

With this loan, we will be able to increase the sustainable productivity of more farmers in Kenya and at the same time protect the environment.

The team

Alex Eaton

CEO and co-founder of Sistema.bio, Alex was working on solar energy projects in Central America when he discovered the potential of biodigesters and transformed a low-quality technology into a sustainable, empathetic, profitable and global social enterprise.

Esther Altorfer

CFO of Sistema.bio, Esther is passionate about leveraging innovative financing structures to improve access and affordability of biodigesters to small farmers.

Raymond Chepkwony

Country Director for Sistema.bio Kenya, Raymond is complementing the team with his last-mile agricultural financing and operations experience to bring the Sistema.bio digester into thousands of Kenyan homes.

Partners

●       BID

●       ENGIE

●       LCEF

●       Factor[e]

●       Shell Foundation

●       Kiva

 

Awards

●       Social Business of the year, 2010 Businesses in Development (BiD Network)

●       Switzer Environmental Leadership Fellow

●       Fellow Ashoka, New Ventures Mexico

●       Buckminster Fuller Challenge 2017 Finalists

●       Endeavor entrepreneurs

●       B Corp

●       GIIRS Company

●       UBS Visionaries

Company nameSistema.bio
CEOAlex Eaton
Founded2010-01-01
LocationNairobi
SectorAgriculture
Turnover€1,500,000
Employees80

Impact of this project

  • With this investment 360 biogas digester systems are installed
  • With this investment 10 jobs are created
  • With this investment 2160 people are reached

About the investment

TypeDirect investment
IssuerSistema.bio
Funding target€150,000
Annual interest6.50%
Maturity12 months
Repayment periodSemiannually
CurrencyEUR
Terms and conditionsShow
Note termsDownload
Information document issuerDownload

About the risks

What are the risks of investing money?

Our local partners cover the risk of currency exchange rates and loan defaults. They do this by maintaining financial reserves for this purpose . In addition, there is an option to claim their equity if needed. While these measures are intended to minimize the risk to funders, our local partners face risks of their own that could effect their ability to secure a loan. These include: - bankruptcy - currency exchange rates - fraud - operational risks - political and regulatory changes - natural disasters or epidemics.

If you invest direct in a company, hence not via a local partner, risks of default are not covered. As the risk that comes with direct lendings is generally higher than an investment through a local partner, the interest rate is also higher.

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 loans 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?

Local partners must adhere to our mission and work with us to provide loans that are affordable. This insures that local entrepreneurs have access to financing that allows them to grow their business. A local partner must also have a track record. In other words, they must have proven themselves as a meso-credit provider for SMEs. This means (for instance) that the partner must have a solid credit portfolio, along with 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 partner's total balance sheet. A healthy balance between effectuating influence and independence 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 a Company requests for a direct loan. To provide more insights on risks, an independent partie comes in to perform brief analysis on 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 an investing advice.

Does Lendahand provide guarantee on the loans?

Normally 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.

Also, for most direct loans no guarantee is provided. For these investments currency risks are covered however.

Sometimes - and only for some direct investments in Africa - our partner Sida, part of the Swedish government, will provide a guarantee with a maximum of 50%. If this is the case, it will be indicated explicitly.

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 with regards to private and payment details. All sensitive data is sent through an encrypted connection (https). Also, data is stored (encrypted) in a secured facility provided by AWS: the world largest hosting service. Customer documents can only be retrieved by a secured connection and multi-factor authentication.

What happens if the local currency devaluates?

Our local partners and Companies bear the exchange rate risks. We settle the loan, redemptions, and interest payments in euro.

Does Lendahand use a third foundation fund?

Lendahand works with Intersolve EGI: a Dutch financial institution that specialises in offering services in the field of 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 is in possession of 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 in no way has 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) would go bankrupt trades between Lendahand and payment service provider Intersolve EGI would cease immediately. Intersolve will then transfer the funds in your personal 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 investees up 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 who have trusted money and or financial instruments (such as notes or options) to a licensed bank, 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 EUR 20,000 per individual. For more information, go to www.toezicht.dnb.nl/en/2/50-202210

Why is my money going via Intersolve EGI?

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 payments. This collaboration offers you more security, since your money is placed on a protected bank account immediately after you have made your payment.

What happens when a local partner goes bankrupt?

When a local partner goes bankrupt, there will be a chance that you lose (part of) the amount you lend. Obviously Lendahand will try to recover outstanding payments, but the success rate will be limited in such situations. For the investor there is no possibility to take action against the financial institution. From a legal point of view the local partners are separated, therefore it is recommendable to spread loans across different local partners.

About Sistema.bio

Total assets€1,514,787
Revenue€1,154,780
Leverage ratio33.00%
Solvability49.30%
LiquidityNo short-term liabilities