KSPPS Lumbung Artho

With a loan of EUR 13,000 Lumbung Artho can support its local artisans and preserving this traditional livelihood.

  • CountryIndonesia
  • TypeLocal partner investment
  • IssuerNusa Makmur
  • Amount€13,000
  • Annual interest3.50%
  • Maturity12 Months
  • CurrencyEUR
  • 1 new job
  • 4 people reached
Fully funded in 1 day on 24 July 2017.

Jepara, Central Java, Indonesia is famous as the centre of Javanese teak wood carving. Teak or Tectona grandis grows fast in this fertile area of volcanic soil. Jepara produces typical household items such as tables and bookcases, as well as exotic and specialised products such as mosque pulpits and calligraphy carvings. Jepara wood art exhibits a distinctive style of harmonious design.  The sector employs approximately 80,000 people, working in mainly small-scale shops. These small shops account for about 95% of total sector production. The livelihoods of millions of people in Java depend on these small shops and its value chain. 

Jepara’s wood carvers face problems of increasing wood scarcity compounded by competition from large companies with sophisticated global logistics some of whom benefit from illegal logging. These threaten good local forest management and small local businesses. Lumbung Artho hopes that with better access to capital, local producers can hold their own against increasing local and global pressure on both their businesses and their natural resources.

Lumbung Artho is a Savings and Loans Cooperative where 95% of its members are the small craftsmen of Jepara. Through its partnership with Nusa Makmur, Lumbung Artho funds the wood-carving industry preserving and developing carving talent and manual woodworking skills passed down the generations, thereby protecting local employment, communal skills and local management of local natural resources. Lumbung Artho has been partnership with Nusa Makmur since December 2014 with unblemished on-time repayments since its first drawdown.

Lumbung Artho Cooperative was first established by Mr. Abdul Wahid Badri, the Commissioner of the Cooperative, to support the Al-Islah Foundation for orphans and the poor during the 2009 economic crisis with capital from community members. From this humble start, Lumbung Artho now has 2 branch offices with 4,300 members. The cooperative now funds local woodcraft businesses and continues to support the Foundation with 30% of its yearly profit, which in 2016 increased 244.73% (to Rp. 136 million). Lumbung Artho seeks new funding to support its local artisans and preserving this traditional livelihood. Through the generations, craftsmanship inherited from their ancestors has been their art and their livelihood.

  • Company nameKSPPS Lumbung Artho
  • OwnerNurul Khafid
  • Founded2009-01-01
  • LocationJepara
  • SectorFinancial services
  • Turnover€76,857.94
  • Employees14

Impact of this project

  • With this investment 1 job is created
  • With this investment 4 people are reached

About the investment

  • TypeLocal partner investment
  • IssuerNusa Makmur
  • Funding target€13,000
  • Annual interest3.50%
  • Maturity12 Months
  • Repayment periodSemiannually
  • CurrencyEUR

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 info@lendahand.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?

Lendahand works with Intersolve EGI: a Dutch financial institution that specialises in offering services in the field of payment settlement and electronic money. To be able to offer these financial services Intersolve EGI must comply with the applicable financial legislation. Intersolve EGI is therefore supervised by De Nederlandsche Bank (DNB) and the Netherlands Authority for the Financial Markets (AFM) and is in possession of a license to act as an Electronic Money Institution (and therefore also has a license as a Payment Institution). Your money will be deposited on a protected and secure bank account until the project you have invested in has been fully funded. Intersolve in no way has access to these funds. Once the project is fully funded, the money is transferred to the local partner or company in question.

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?

As part of the AFM license for investment firms it is required that operational activities carried out by Lendahand (maintaining the website, contracting of local partners, legal issues, etc.) are strictly separated from financial transactions (payments made through the website). Intersolve takes care of the payments. This collaboration offers you more security, since your money is placed on a protected bank account immediately after you have made your payment.

What happens when a local partner goes bankrupt?

When a local partner goes bankrupt, there will be a chance that you lose (part of) the amount you lend. Obviously Lendahand will try to recover outstanding payments, but the success rate will be limited in such situations. For the investor there is no possibility to take action against the financial institution. From a legal point of view the local partners are separated, therefore it is recommendable to spread loans across different local partners.

About Nusa Makmur

Number of companies in portfolio43
Total assets€1,996,667
Leverage ratio10.40%
Write-off ratio last 12 months0.13%
% investment amount in arrears (>90 days)4.60%
% investment amount in arrears (>180 days)3.34%