Typically a project only receives the money if the full amount is financed. If that is not the case, then the funders get their committed money back.
There are several forms of crowdfunding: donations, loans, equity, profit-sharing, or rewards based. The two most important ones are:
- Through a donation; (sometimes a product or a small gift is gifted in exchange for the donation)
- Through the disbursement of a loan or by buying shares
Through our website you can collectively invest in small and medium enterprises (SMEs) in emerging countries, through a local partner based in the country of the SME. The main advantage of this structure is that the local partner will cover the risks of defaults of the SME's and currency exchange. This structure enables us to provide fair interest rates to the SME's and you receive a healthy interest as well.
- Interest: the realized return is usually significantly higher than the savings rate. In the past years it was twice as high (3% at Lendahand vs 1.4% average savings rate).
- Impact: at Lendahand it is possible to choose the entrepreneurs you want to lend to. That way you have a direct impact on the growth of an individual company.
- Control: many people have lost their trust in banks since the start of the credit crisis and more than ever want to have direct control over their investments.
- Trustworthy: Lendahand only selects reputable SMEs that are subject to a thorough screening process.
- Honest: Lendahand it is fully transparent who pays or receives how much interest.
The term crowdfunding has not existed very long. In the Netherlands, this form of financing has gained momentum in the last five years. In times where banks have limited the loans they disburse, crowdfunding has proven to provide a solution for this financing problem. Furthermore, the average savings-rate seems not to be interesting enough to grow your capital.
Crowdfunding offers often an interest rate somwhere between 4-6%, which makes it an interesting alternative for putting your money away for a fixed period. In the Netherlands, most of the websites focus on investing in a concept or in a company. The basics of an investment are very clear: invest in a company to maximize interest. In the Dutch landscape, donation-based crowdfunding is less common.
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Cambodia | 48 months | 3.25% interest
With a loan of EUR 11,200 Meiy is able to expand her wedding embellishment service and by more equipment.
39% raised so far, € 6.800,- required
Max 57 days to go
SM Gram Bikash Kendra 4
India | 24 months | 3.0% interest
With a loan of EUR 30,800 around 100 woman in the Bengal province will purchase cloth in bulk, and upgrade their handlooms.
74% raised so far, € 8.000,- required
Max 53 days to go
Sollatek Electronics Kenya 2
Kenya | 36 months | 5.5% interest
With EUR 100,000 Sollatek can provide 2,000 solar lanterns and 200 solar home systems to households and companies.
26% raised so far, € 73.750,- required
Max 56 days to go
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