Lendahand are familiar faces here at Symbid following their first funding round, successfully raising 60,000 from 48 investors in 2014. Now theyre back after growing exponentially in the last 6 months and this time they mean business. In fact, theyve already raised over 240,000 in under 2 weeks!
Lendahand is a do-good crowdfunding platform with a difference. They specialise in funding small businesses in developing countries like the Philippines, Ghana, Colombia, Mongolia etc. Investors get a 3-4% interest rate on loans while helping entrepreneurs who otherwise wouldnt get funded.
The platform is proof that financial return and positive social impact can go together. So far theyve funded around 400 small businesses with 3 million, from 850 lenders and 50% of all that came in the last 6 months.
1. When did you decide to become an entrepreneur, and why?
Peter Heijen, CEO
While travelling in Sri Lanka in 2010 I decided to really put some effort into improving the financial system in upcoming countries. I could not understand why it was so hard for (small) companies to get (affordable) loans in these developing, growing economies. Also, I was convinced that ours should be the last generation to know widespread global poverty.
I saw that we had all the tools and technology required to ensure developing countries became self-sustaining. I resolved to combine all these insights in a social enterprise that would help small businesses in poorer parts of the world get funded and grow, thereby supporting their community in a sustainable way. I founded Lendahand in a very small apartment in the east of Amsterdam, somewhere in 2011.
2. What kind of entrepreneur are you?
Well, quite opportunistic as a matter-of-fact. If I see an opportunity, Im quite keen on grasping it. The world of online continuously presents these opportunities, day after day. I try to experiment as much as possible based on user feedback and analytics, then implement the features that score highest with the crowd. Furthermore, I strongly believe in partnerships with NGOs, (social) banks and other crowdfunding platforms. Its not a stand-alone economy anymore, but a network economy.
3. In a few sentences, introduce your company
In high-income countries small and medium enterprises (SMEs) provide 60% of the jobs. They are the engines of economic growth and support our high standard of living. In emerging countries they only account for 30% of the jobs.
The best reinforcement for any economy is a strong middle class. If employment grows, poverty is reduced. Eventually healthcare and education will improve as more people are employed and contributing to society. The problem lies in the fact that SMEs in emerging countries often do not have access to (affordable) financing.
Lendahand enables crowdfunders to provide meso-credit to give these companies a push in the right direction. As this leads to the addition of jobs and income, the poor will profit from this. The crowdfunder can expect a financial return of 3-4% per year while benefitting from the expertise and creditworthiness of our network of local partners. Social impact and financial return truly coexist at Lendahand.
4. Describe the past, present and future of your company
The first 2 years were though very interesting not particularly fun. You have to do everything, and I mean everything, by yourself. It is a period of collecting information, finding the right people willing to help you for free. That critical phase (man with a dream) is thankfully over.
We now have a professional team with 7 people, 5 full-timers and 2 part-timers. For each of our critical processes we have someone in charge: selecting local partners, professionalizing the backend, improving the website, obtaining a AFM license etc. Furthermore we have a Board of Adviors containing 3 very experienced business people. Our numbers are looking good: 3 million lent to 400 SMEs from 850 lenders, and 50% of that all came in the last 6 months. Located right next to Rotterdam Central Station in the Groothandelsgebouw, we have a perfect spot to further expand Lendahand.
The future looks bright. We are right on track in achieving our ambitious 2015 targets and we are aiming to create at least 50,000 jobs in 2018, meaning 150 million in provided loans.
We are about to submit our request for a license from the AFM (Dutch financial regulator). Such a license will help us expand internationally (e.g. to the UK) as we can passport the license to other EU countries. As an online platform its fairly easy to offer our products in other countries. Most of the marketing takes place online.
Next to the crowd we are aware that (small) institutional investors and corporates would also like to use our platform to invest in emerging markets. We may have to expand our product offering in order to cater them, but product development is something we think we are good at.
5. What is the unique value of the products/services you offer?
We are the only online platform where people can invest in small & medium businesses in emerging markets while obtaining a fair interest rate.
Selection and monitoring is done by local financial institutions that have extensive experience in this field.
They help out in case a company cannot repay the loan, reducing the risk of non-payment for the crowdfunders (the local partners basically assume the credit risk of the crowdfunders).
Overall Lendahand offers a unique proposition that is in between saving and investing directly in SMEs, where people are in control of their money and create social impact.
6. What is the main goal of your equity crowdfunding campaign?
- Raise at least 350,000 to enable Lendahand to further expand its operations
- To give our lender base the opportunity to become an owner of Lendahand and be part of our success
- Acquire some new lenders on our crowdfunding platform
Lendahand covers the missing middle of SMEs in developing countries
7. What have you learnt from your equity crowdfunding campaign so far?
- Our lender base are indeed very enthusiastic about becoming shareholders so far weve raised 240,000 in under 2 weeks!
- Crowdfunding is all about momentum we funded the first 50% in 1 week, and its crucial that we build on all the excitement and buzz around our campaign to get funded
- People truly appreciate it if you are open and honest about all the risks of investing
8. Why Symbid?
Symbid and Lendahand go way back. In 2014 we were neighbors in the same building and frequently talked about working together. It was just a logical step to do the first equity campaign with Symbid (which was a success). After that, because of economic reasons, we opted for a convertible loan. Now we are back, because of the seamless interaction and communication we have with the Symbid team.
9. Give 3 key reasons to invest in your company
Lendahand has the right product, a proven track record, and the right skills and experience. Were passionate about doing good, and doing it differently.
- First online lending platform for small businesses in developing countries
- Proven concept over 2 years of business, 850 lenders, circa 400 SMEs funded with close to 3 million
- Highly scalable model with new countries being added all the time
- Think global, act local philosophy loans secured by strong local partners
- Combines positive social impact with sustainable financial return
- Growing rapidly, large potential upside for investors (35% annual ROI according to conservative estimates)
- Highly experienced team