Lendahand's Response to COVID-19
Written by Koen The on 5 April 2020
Although Lendahand has not yet experienced any direct effects from the COVID-19 virus (as of 2 April 2020), we nevertheless decided to implement a number of measures to help mitigate future consequences.
The majority of our outstanding funds are currently in Africa, India and Mongolia. We have reached out to all our partners in the hope to better understand their pre-empted views regarding the impact of the COVID-19 virus on their business operations. To date, their findings do not indicate that there will be any (extra) delays in respect of scheduled repayments in the short term.
However, as the situation changes on a daily basis, Lendahand has come up with a new temporary approach.
The five temporary measures (starting immediately) are as follows:
1. Fundraising Limits
All existing partners (except those recently contracted in 2020) will be limited to only raising funds equal to the amount of their current exposure at Lendahand (as of 31 March 2020). This means that the outstanding exposure of each partner will not increase, even if the pre-existing credit facility permits it.
2. Revised Terms
Lendahand plans to mitigate any potential liquidity effects on its partners due to the temporary exposure freeze by allowing partners to offer new projects (the total value of which may not exceed the planned repayments of that month), with revised terms on a case by case basis.
a. Interest Rates
In certain cases, the interest paid to investors will be marginally higher, as included in the contracts, to reflect the current increased risk in global markets. Although the higher interest is not fully reflective of the additional risk, we believe it is aligned with our company's mission and balances the impact on partners while still accounting for the additional risk to our investors.
b. New grace period introduced
Certain partners will furthermore be eligible for a "12-month grace period" with respect to both principal repayments and interest payments, meaning such partners only have to make their first payment after 12 months, instead of the usual 6 months.
c. Unchanged LAH Fee
The Lendahand fee structure will remain unchanged, meaning that the entire interest increase will thus be directly passed on to our crowd.
d. Other Measures
Other appropriate measures could be put in place for certain eligible partners on an individual basis.
3. New Information on Project Pages
Going forward, each project page will clearly state that the uncertainty has increased, as well as reflect any changes in interest rates or repayment terms that may have been made due to this new uncertainty.
4. New Project Assessments & Agreements
Each partner's request to launch new campaigns will (still) be individually assessed. Additional requests will be made to the partner for COVID-19 related contingency plans and the position of other creditors (excluding Lendahand investors) will be taken into account when assessing these requests.
Partners will also have to agree that Lendahand refinancing will not be used to service other creditor’s obligations. Where funds raised are used to refinance scheduled repayments to Lendahand, this will be explicitly indicated on each corresponding project details page.
5. New Partners
Lendahand remains committed to engaging new partners as we continue to diversify the portfolio and range of projects available, however, our primary focus at this juncture is to assist existing partners.
These measures are subject to change depending upon how the situation unfolds and may be amended, within reason, on a case by case basis depending on our partners’ needs. We will keep you updated with new information as it becomes available.
If you have any questions please contact us at email@example.com
On a personal note from all of us Lendahand, we continue to wish safety and good health for all of you and your families during this difficult time.