Partner Creze will use the EUR 150,000 to finance 10 SMEs in Mexico active in the retail, construction and transportation sector. This will contribute to reduce the SME financing gap, create jobs and improve livelihoods. Approximately 25% of the companies funded by Creze are female owned. **please note: this project contains an exchange rate risk EUR/USD)**
Loan (not notes)
In this case, you will not acquire notes in an issuing entity, but you will provide a loan. While loans and notes both constitute financial instruments there are a few legal differences between the two instruments namely:
- Loans are signed both parties (ie the Borrower and the Lender/Investor);
- The contractual terms of a loan are more comprehensive than that of a note;
- Loans impose obligations on Lenders/Investors and
- Loans cannot be traded amongst Lenders/Investors.
- Currency: EUR
- Amount: 150,000
- Maturity: 36 months
- Repayment schedule: monthly and linearly amortizing
- Grace period on repayments: 18 (only on notional repayment)
- Interest rate: 6% p.a. (no grace)
Click here for an example repayment schedule.
Creze (officially Prestadora de Servicios Ciclomart, SAPI de CV) is a balance sheet lender founded in 2015 and based in Mexico City that originates loans to small and medium sized enterprises (SMEs) across Mexico. As of the end of April 2021, Creze has disbursed over $68m USD since inception, with an outstanding book of just over $17m USD (note that the net portfolio did not grow compared to 2020 due to Covid). The average loan amount is $19,500 USD, the average loan term is 12 months, and almost 90% of loans are paid biweekly.
The company offers a single core loan product aimed at providing working capital to SMEs but lend across most industries. Creze is a technology-enabled lender that has built an origination platform inhouse that allows for a fully online and digital loan application process with 24-48 hour approval times.
Creze is backed by two reputable family offices in Mexico and has attracted several institutional lenders, including Lendahand’s co-financing partner, that originated this deal for the Lendahand platform.
Creze is registered as a Mexican SAPI and has over 60 employees. The founding management team is well seasoned and composed of a mix of entrepreneurs and ex-finance/micro-finance people.
To be the leader in SME financing in Latin America by facilitating access to financial products that promote the growth of a market segment that is widely considered the motor of the economy.
Use of Proceeds
The proceeds of this project will be used by Creze to finance approx. 10 MSMEs in Mexico active in the retail/industrial/technology/construction/transportation/telecom sector. This will contribute to reduce the MSME financing gap, create jobs and improve livelihoods. Approx 25% of the companies funded by Creze are female owned.
The underlying loans provided to Creze’s customers, will be held in a sub trust in Mexico assigned to the Lendahand crowd as collateral. Lendahand’s co-financing partner will monitor the performance of the receivables and the sub-trust. This makes for a relatively complex structure, but one that does protect the Lendahand investors. In case of bankruptcy by Creze, these assets cannot be accessed by Creze and the subtrust agent will continue to collect from the assigned receivables that are indirectly owned by Lendahand crowd. The pledged collateral asset value will be 1.2x the loan provided by the Lendahand crowd.
Note re this project’s money flow, which is different from normal: the funds raised on this platform will be channeled via a special purpose vehicle that will invest the funds further, ultimately providing an indirect loan to Creze.
|Wholesale / Retail
Mexico has 4 million SMEs, representing 60% of the formal productive employment in the country. Yet more than half of these SMEs don’t have access to the financing they need. Financial institutions like Creze help them overcome this hurdle by offering quick and flexible loan solutions through their digital lending platform.
Even entrepreneurs who can’t present formal credit history are welcome to apply for a small loan. Creze’s goal is to leave no SME behind in the funding gap. They offer entrepreneurs a fully online and digital loan application process with 24-48 hour approval windows. Their working capital loans enable SMEs to create jobs, grow their businesses, thusly reducing poverty.
With this project you are contributing to the following Sustainable Development Goals:
SDG 1 - No poverty
SDG 8 - Decent work and economic growth
Read more about the impact you can make through our platform and the SDGs on our impact page.
Related blog posts
Read the introduction of Creze as a new investment opportunity here.
Meet entrepreneurs Dinora and Eduardo here and learn how they grow their businesses with a loan from Creze.
Want to learn more about how financial inclusion can thrive entrepreneurship? Read here.
- With this investment 10 jobs are created
- With this investment 50 lives are improved