Volunteers for Development

With EUR 19,450 some 100 women are able to purchase threads, buttons and other materials to expand their weaving businesses.

  • CountryInIndia
  • TypeLocal partner investment
  • LenderMilaap
  • Amount€19,450
  • Annual interest3.00%
  • Maturity24 Months
  • CurrencyEUR
  • 6 new jobs
  • 24 people reached

Read the information document from the issuer here

Manipur is one of the ‘seven sisters’ in the Northeastern region of India. The state is breathtakingly beautiful but happens to be one of the most impoverished states in the country. The region has had a very volatile history, and continues to be fraught with problems relating to insurgency. Against this backdrop, Manipur houses several underserved communities- majority of which have tribal ancestry. The area lacks even basic infrastructure in some places. Although it is home to more than 33 different ethnic groups, there is a perpetual breakdown of law and order. As social peace is not assured in this volatile region, Manipur finds it difficult to attract investment in the region due to rapidly rising ethnic violence. However, with abundant natural resources like lush hills and plenty of rivers, the state holds much promise in traditional cottage industries and tiny village based units that are critical to provide employment. 

Weaving is the biggest industry in Manipur. One of the most special features of this sector is that Manipuri weaving is entirely the work of women. It is considered a part of their domestic duties. They make a remarkable contribution to this sector. There are unique embroidery and weaving styles such as  Moiraingphee, Leirum, Lasingphee and Phanek. Volunteers for Village Development has recognized the importance and influence of women workforce who have the skills for this beautiful art of intricate designing. Presently, about 35% of the total clients of Volunteers for Village Development are weavers. This craft is so rich, that it takes time and dedication to preserve it. Nearly one in four households is headed by women today- with weaving being the primary source of income for them.

Currently, 100 women from Imphal East in Manipur are seeking a loan to invest in their respective weaving enterprises. Through this loan, they will be able to purchase raw materials such as threads, buttons and upgrade/repair their weaving looms.

Local partner Milaap provides the loan, which has to be paid back in 24 months. 

  • Company nameVolunteers for Development
  • OwnerYuireihor Khaleng
  • Founded2007
  • LocationManipur
  • SectorFinancial services
  • Turnover€2,896,145.37
  • Employees32

Impact of this project

  • With this investment 6 jobs are created
  • With this investment 24 people are reached

About the investment

  • TypeLocal partner investment
  • LenderMilaap
  • Funding target€19,450
  • Annual interest3.00%
  • Maturity24 Months
  • Repayment periodSemiannually
  • CurrencyEUR

About the risks

What are the risks of lending money to entrepreneurs?

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 or in dollar.

Does Lendahand use a third foundation fund?

Lendahand works with LemonWay, a regulated payment service provider. Since LemonWay is a French company there is no 'Stichting Derdengelden' as such. However, LemonWay works in a similar manner and has a license from the French ACPR (Autorité de Contrôle Prudentiel et de Résolution). Your money will be deposited on a protected and secure bank account until the project you have invested in has been fully funded. LemonWay 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 LemonWay would cease immediately. LemonWay 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). LemonWay 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. 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 to a payment service provider?

As part of the AFM license for investment firm 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). LemonWay 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 LemonWay goes bankrupt?

The money of investors already on the (shielded) bank account of LemonWay will not be part of the bankruptcy. Bank BNP Paribas will then handle the case. Money outstanding with Local Partners and Companies (direct loans) will be handled by a to propose curator.

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 Milaap

Number of companies in portfolio41
Total assets€3,880,226
Leverage ratio66.00%
Write-off ratio last 12 months0.00%
% investment amount in arrears (>90 days)0.50%
% investment amount in arrears (>180 days)0.80%

We have already contributed for Volunteers for Development

W200h200 paJan de Wit
W200h200 imageMenne Glas
W200h200 ivo richaersIvo Richaers
W200h200 img 20170524 wa0002marian koning
W200h200 freek baliFreek Brouwer
+ and another44investors

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