Types of Investments

funding gap emerging markets

Explore the types of investments available to diversify your impact investment portfolio on Lendahand.


Financial Institution

Invest in multiple businesses at the same time

With this type of investment, you invest in financial institutions that offer loans to several Micro, Small, and Medium-Sized Enterprises (MSMEs) in emerging markets at the same time. 

Your investments in financial institutions through Lendahand come with a layer of protection. The financial institutions cover most of the risk of defaults and currency fluctuations, and you automatically diversify your investment between multiple SME entrepreneurs. 

Investing in a financial institution is rewarded with an interest rate between 4% - 7%. The credit score of these loans is between A and B (on a scale of A to E) and the historical write-off percentage since 2013 for this type of investment is 0.37%.

Lendahand carefully selects impact-minded Financial Institutions (FI) that seek funding to ensure local entrepreneurs receive a fair loan. Our network comprises: 

  • Advantages of investing in financial institutions:
  • ✓ Interest rates between 4% - 8% annually.
  • ✓ Risks like currency fluctuations are typically covered. Defaults as well, depending on the reserves of the financial institution.
  • ✓ Your investment strengthens several entrepreneurs at the same time.


Who benefits from this investment? 

 

Business

Invest in a single business

With this type of investment, you directly invest in a privately owned for-profit business in an emerging market. You will primarily have the opportunity to invest in impactful companies active in the clean energy and agricultural sectors.  

Lendahand only selects businesses that match our stringent financial criteria. However, with this type of investment, default risks are not covered, as there is no intermediary between you and the business. 

Investing in a business is rewarded with an interest rate between 5% - 9%. The credit score of these loans is B or C (on a scale of A to E), and the historical write-off percentage since 2013 for this type of investment is around 5%.

The companies we select for our crowdfunding platform must demonstrate that they make a significant contribution to the UN’s Sustainable Development Goals (SDGs). Through Lendahand, these impactful businesses can access financing at a lower interest rate than typically available. The impact you are creating is higher and more direct compared to the previous investment type.

  • Advantages of investing in a single business:
  • ✓ Interest rates between 5% - 9% annually.
  • ✓ Your investment provides families and enterprises in emerging markets with basic needs such as (clean) energy and makes a substantial contribution to the reduction of CO2.
  • ✓ Businesses in the agricultural sector contribute significantly to providing food security in developing countries.


Who benefits from this investment? 

 

Partner Project

Invest in a company or financial institution selected and monitored by an external partner

With this type of investment, you finance a company or financial institution in an emerging country, just like the abovementioned investment types. Experienced institutional investment parties carry out the selection and monitoring of these enterprises. The collaborations open doors to certain sectors and countries where these partners have years of experience and an extensive network.

Lendahand is currently collaborating with the following external partners for the selection of certain borrowers:

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The companies proposed by the external partners meet the same impact criteria as the borrowers selected by Lendahand. Here, too, it applies that the risks of bankruptcy in direct loans to a company are not covered by an intermediary, making them higher than investments in financial institutions. On the other hand, currency fluctuations (on euro projects) are hedged.

Investing in borrowers selected by an external partner offers you an annual interest rate between 5% - 9%. The credit score of these loans is rated A or B (on a scale from A to E).

Only companies that can demonstrate their contribution to the United Nations Sustainable Development Goals (SDGs) are eligible. Through Lendahand, these impactful companies gain access to financing at a lower interest rate than what is normally available to them.

  • Benefits of investing in a project selected by an external partner:
  • ✓ Interest rates between 5% - 7% annually.
  • ✓ Investing in a project selected by an external partner indirectly grants access to a broader range of sectors, which Lendahand may normally not reach.
  • ✓ Diversify your portfolio with impactful companies from reputable impact asset managers.


Who experiences the positive impact of this investment?