The project

 PLEASE NOTE: this is a project where the EUR proceeds will eventually be transferred as USD to the issuing entity. The issuer’s obligation is to pay back the USD amount plus interest. Their repayments in USD will be converted to EUR, which will be put on your wallet. It means that you run an exchange rate risk on this project. The return may be higher or lower than expected in advance. At the moment the interest rate differential between USD and EUR is such that the interest rate on USD projects is, net of conversion costs, between 0.5-1%point higher. Read here for more information.

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.

Also, the General Terms & Conditions are a little bit different than for notes. The same goes for the Loan Participation Terms and Conditions:

• General Terms & Conditions
• Loan Participation Terms and Conditions

General information:

• Borrower:                                            Prestadora de Servicios Ciclomart or ‘’Creze’’
• Country of operations:                      Mexico               
• Website:                                             https://www.creze.com/
• Date of incorporation/Founded:     2015
• # of employees:                                 60
   

Project terms

• Currency:                                            EUR
• Amount:                                             400,000
• 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)

Documents

Information document issuing entity

Information note issuing entity (for Belgian investors)

Summary

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.

Mission

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. 22 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.

Impact

The Financial Inclusion goal of creating “SME & Jobs” has a core outcome of supporting decent jobs and fostering economic development and is directly related to two SDGs: # 8. Decent Work and Economic Growth and # 10. Reduced Inequalities while be indirectly related to 5 SDGs: #1. No Poverty, #2. Zero Hunger, #3. Good Health and Well-Being, #5. Gender Equality and #9. Industry, Innovation and Infrastructure.

COVID-19 Update

• Being active in one of the worst impacted country in the region, Creze suffered a lot due to Covid and the portfolio growth has largely remained stagnant. The management’s response was proper and quick, offering moratoria to customer segments that were expected to be hit hardest (e.g. hospitality, education) and other clients assessed on a case by case. As the pandemic progressed, they adjusted their response where required. With more pressure on liquidity, they reduced management pay by 50% first. Later, they reduced salaries of all staff as well (between 10-20%). At the same time they tried to leverage on technology and data, and learned they could operate much more efficiently and do the same work with approx. 50% of the staff, hence people were laid off. During COVID one of the shareholders committed USD 13m in equity proving their commitment.
• Mexico is slowly but surely recovering and Creze has started to increase their portfolio again after a deliberate freeze. They grew the portfolio in the past 2 months with 15% already and collections are back at + 95% levels. The advance rates / collateralization rates of Accial’s facility have been kept solid and the company hasn’t missed any interest payment. Their shareholders stepped up and committed more capital and liquidity and remain positive on the company’s outlook.
• During COVID, the company introduced secured loans and hired new staff for this purpose. They reduced operational expenses by 40% versus early 2020, significantly improving operating efficiency and are now operating at a profit since Q4-2020.

Management team

Diego Creel – CEO

• Founder TUYO & CCV Latam, later sold to EZ Corp
• UBS and Cemex (Spain); Endeavor Entrepreneur

Juan Ahedo – CFO

• CFO at Financiera Contigo, MBA Boston College
• 15+ years of experience in finance and credit

Bernardo Prum – COO

• Co-founder Coru (backed by QED and Thiel Capital)
• 8 years in Bain & company, Master in Finance Berkeley