L Evaristo Shoe Shop
- TypeLocal partner investment
- Annual interest3.00%
- Maturity12 Months
- 1 new job
- 4 people reached
Larry (Lauro) Evaristo is an entrepreneur that grew up in a shoe manufacturing environment. As his parents used to own a small shoe factory, he was exposed to and grew accustomed to shoemaking from a very young age. As a child, an uncle of his taught him how to make the patterns. While he was finishing school, he earned some money as a part-time pattern maker. Later on, he became a production manager for Medford shoe manufacturing in Calumpang, Marikina a position he held for seven years.
In 1992, his parents decided to close down the factory, and Lauro took this as an opportunity to assume the business, as the equipment and tools were already at hand. Through some friends in the Bocalo Shoe Corporation which supplies to big malls like Supermall (SM), he was able to start selling directly in Supermall (a leading chain of malls in the Philippines). This gave him a big break and allowed his business to grow. Purchase orders came in bulk. From 6 workers, he grew his production to 25 workers (14 males and 11 females).
The success enabled him to provide his worker with social services like Social Security System, Philhealth and Pag-ibig. These are benefits that a.o. allow workers to draw income when they reach the age of 60 and provides them with access to low interest loans. These social services are mandatory for big companies, but are less common for small companies as they often can not afford them. He also provided two of his workers with free lodging and he arranged medical assistance to his workers whenever it was needed.
By 2000, imported shoes from China had invaded the Philippine market. This had adversely affected a lot of local shoe manufacturers. It had become very hard to compete against the imports. Although the imported shoes were of inferior quality, they were a lot cheaper. The big malls were cutting their orders to local producers and started to buy more and more shoes from China. The Chinese competition and restrictions by the big malls made it harder and harder to sustain the business. E.g. the SM mall extended their payment term from 60 to 120 days and the design of the shoes had to be approved by the SM mall. After many rounds of making sample after sample and still being rejected, it became clear that they were not going to win the business anymore.
However, Lauro still had his passion for the industry and he realised that shoe making is the only thing he knows. So he decided to go back to what he does best and he ventured out to produce slippers (mostly) for men. He created the brand name Spartacus and this gave him a way back into the industry.
It was not an easy comeback at all. He had to borrow money from his cousins. After a while they suggested that he should get a loan from a financial services company. This could augment his working capital, enabling him to grow bigger. Indeed, this turned out to be true when his accountant introduced him to the Negosyong Pinoy Finance Corp (NPFC). Barely a month after he received the loan from NPFC, the company already had to do overtime to prepare stock for the Baguio caravan, which has more than 2 million local and foreign tourist attending the Panagbenga Festival. Larry and his team ended up producing three thousand pairs of shoes for selling at the festival. This also generated additional income for his workers because of the overtime.
Right now Larry is supplying shoes to Zanea which also sells shoes themselves and to the ES Fashion Boutique. He has a stall in Marikina Riverbanks and the Marikina Trade Fair. With annual gross sales of 2 million, Larry Evaristo has come a long way from being a part-time pattern maker to a big time shoe-maker.
- Company nameL Evaristo Shoe Shop
- OwnerLauro Evaristo
- SectorManufacturing / Production
Impact of this project
- With this investment 1 job is created
- With this investment 4 people are reached
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 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 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?
No. 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 direct loans no guarantee is provided.
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?
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?
What happens when a local partner goes bankrupt?
|Number of companies in portfolio||378|
|Write-off ratio last 12 months||14.20%|
|% investment amount in arrears (>90 days)||19.90%|
|% investment amount in arrears (>180 days)||10.20%|