As of September 2016, the Dutch Authority for Financial Markets (AFM) issued Hands-on B.V. (trade name ‘Lendahand’) an investment firm license in accordance with article 2:96 of the Financial Markets Supervision Act (WFT). Therefore, placing orders on Lendahand’s website is officially an AFM regulated activity. Accordingly, Lendahand meets its minimum capital licensing requirement of EUR 125,000, set by De Nederlandsche Bank (DNB).
Prior to licensing, board members who would be tasked with setting policy at Lendahand are tested for their suitability and reliability. They are assessed based on their C.V. (Resume), experience, education, aptitude and references. Along with this, Lendahand’s activities are screened for integrity and the control of business operations. Also, administrative measures such as supervisory and organisational oversight are viewed in a positive light.
To make investments via Lendahand possible debt instruments like bonds are issued to the crowd (also called lenders or investors). The provider of the debt instruments to the crowd is called an ‘issuer’, at Lendahand these are the financial institutions that finance the Small and Medium Enterprises (SMEs) in emerging countries. Though in some cases the entrepreneurs on our platform raise capital themselves directly on our platform. Issuers only get access to the Lendahand website for projects when they comply with the admission requirement and quality standards beforehand. This includes the acceptance of the conditions for using the platform.
The crowd is able to select one or more projects (propositions) that he/she can finance by purchasing bonds (or similar instruments) worth 50 euro each. Once the payment of the investor is successful, the purchase agreement is established. This agreement is entered under the condition precedent that the project (the proposition) will meet enough registrations. Investors accept the Terms and Conditions in which the purchase agreement takes part. Once the proposition is financed fully, the condition precedent is met and the bonds are issued to the investors who have registered to the respective proposition.
In this structure the bonds of the issuers (often the local partners) become inserted and held in the concerned deposit. These pieces qualify as SFA-conform kept financial instruments which have been separated from the assets of Lendahand and therefore are protected as such. The issued bonds by the crowd are always excluded from a possible bankruptcy of Hands-on BV (which carries the brand name Lendahand).
The offerings of the issuers themselves are not supervised by the AFM. Therefore a warning banner is shown on some pages of our website. This banner only informs visitors about the fact that the offering on the website are exempted from the obligation to publish a prospectus approved by the AFM. Lendahand and the issuers we work with, make use of this exemption prospectus obligation that applies to EUR 5 million per issuer per year. However, as of October 1st 2017 it is required to publish a mini-prospectus per proposition. This mini-prospectus is sent to AFM as well, but will not be qualified as such.
LemonWay is a regulated payment service provider located in France. The company was founded in 2007 to offer innovative solutions regarding secure payment, banking, credit card and the internet. Since the 24th of December, 2012 LemonWay is recognized by the ACPR (Autorité de Contrôle Prudentiel et de Résolution) in France with the Inter Bank Code (IBC) 16568. LemonWay is officially registered in the Netherlands with the Dutch Central Bank.
With an AFM-license it is required that some activities by Lendahand (website support, contracting Local partners, legal issues etc.) are strictly seperated from financial transactions (payments via websites). LemonWay provides settlement of payment traffic. Directly after payment, your money will be deposited on a protected and secure bank account.
Investor compensation scheme (ICS)
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. The ICS guarantees an amount of up to EUR 20,000 per individual per institution.