About investing in a project
When do I start receiving interest?
When there are enough funds to meet the required loan amount, the loan will be disbursed on the first day of the following month. Your loan bears interest as of that day.
What does it cost to invest via Lendahand?
There are no costs associated with joining our platform or investing, whether you pay via iDeal or credit card. The repayment process is also free of charge.
How can I pay?
At Lendahand, you can pay for free using iDeal, Bancontact, and Sofort. In addition, investors outside the Netherlands can pay with credit cards, specifically Mastercard, Visa, and Carte Bancaire (also free of charge). You can also transfer money directly from your bank account to your own wallet and then proceed with the payment.
How should I incorporate my investments in my tax report?
For (Dutch) private investors, loans outstanding via the Lendahand platform are categorized in Box 3. You can declare your outstanding funds as of January 1st of any given year under "Bank accounts and other assets". The wallet balance, which is separately stated on the annual statement, can also be declared under "Bank accounts and other assets," but specifically under "bank and savings accounts.".
For business accounts, the return is charged with company tax.
What is the minimum and maximum amount I can invest at Lendahand?
Minimum
At Lendahand, you can invest for as little as EUR 10. This amount can be increased in increments of 10.
Maximum
Lendahand recommends that you only invest amounts that you can responsibly justify (AFM advises not to invest more in crowdfunding than 10% of funds available). Furthermore, we strongly discourage funders from investing with borrowed money.
Is it possible to open a business account?
Yes. When creating an account, select either a 'private' or 'business' account. You will need to supply a (recent) Chamber of Commerce copy, the company’s statutes, and shareholders’ IDs with more than a 25% stake.
What communication do I receive when I invest in a project?
The legal terms for the investment are part of the terms and conditions. You will always get a confirmation email. Additionally, you will receive an email when the project is fully funded. You can also download the obtained notes per project in My Lendahand.
What if a project does not get funded?
If a crowdfunding project does not deliver the required amount within 60 days, your committed investment will be returned. So far Lendahand has a 100% funding rate.
Who is the counterparty when I make an investment?
Is it possible to invest directly in companies?
From which countries can I invest in projects via Lendahand?
You can invest if you have an identification document from one of the EER countries: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, The Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Iceland, Liechtenstein and Norway. Please note: in some countries certain legal and tax requirements may apply to Investors. It is your responsibility to ensure that such requirements are met.
What is the difference between loans and notes?
In which currency can I invest?
At the moment Lendahand offers investments in euros (EUR) and U.S. dollars (USD).
The following applies for euro investments: you pay in euros and are repaid in euros. The risks of exchange rate fluctuations are covered by our local partners and/or entrepreneurs.
For US dollar investments: you also pay in euros and are repaid in euros. However, after a project is fully funded, on the first business day of the next month, the total amount in EUR from the project will be converted to USD at the exchange rate previously set by IbanFirst, our exchange rate partner. Repayments are then converted back from USD to EUR on the repayment day. Find more information on our currency page.
What if I want to cancel my investment?
Can I also invest if I am Belgian?
Prospectus law
The offering of the notes is exempt from the obligation to publish a prospectus in accordance with Article 7 §1, 2° of the Belgian Act of 11 July 2018 on the public offering of investment instruments and the admission to trading of investment instruments to a regulated market. Furthermore, in accordance with Article 11 of the same Belgian Act of 11 July 2018, Lendahand is required to publish an information note. This information note is equally not issued under the control of and will not be approved by the Belgian Autoriteit voor Financiële Diensten en Markten/ Authorité des services et marchés financiers. You will find a specific information note in relation to each project on the project detail page.
Crowdfunding law
In accordance with Article 30§1 of the Belgian Act of 18 December 2016 regulating the recognition and definition of crowdfunding, Lendahand, as a regulated investment firm under supervision of Dutch AFM, is authorised to provide alternative funding services in Belgium.
What is Impact+?
Impact+ is a private investing product for investors who want to invest amounts of € 25,000 or more in our projects. It offers investors the convenience of investing with impact without hassle. With Impact+, Lendahand will handle the investments for you, without additional costs. Visit the Impact + page for more information.
About (re)payments and interest
How much interest do I receive?
The annual interest rate on investments varies from 2-8%, depending on the type of investment.
How do I transfer the proceeds to my bank account?
Everyone who invests via Lendahand has a personal account: My Lendahand. Repayments, including interest, are transferred to this account every six months. You can choose to reinvest your repayments or have them transferred to your bank account at no extra cost. Want to change your wallet settings? Go to Settings
How is the interest being calculated?
Your investments are paid back in equal amounts on a semi-annual basis. For instance, an investment with a maturity of 12 months will be repaid in two parts. You’ll receive payments after 6 and 12 months, including interest. In the next example, we’ll show how principal and interest payments are calculated.
Suppose you invest € 1,000 in project A which is interest-bearing as of 1 January 2023. The loan has a maturity of 12 months and pays an annualized interest rate of 3%.
- On July 15th 2023, you will receive the first repayment of € 500 as well as an interest payment of 3% over € 1,000 for that 6 month period (€ 15). The total amount for thefirst period is € 515
- On Jan 15th 2024, you will receive the second repayment of € 500, as well as an interest payment of 3% over the outstanding notional of (€ 1,000 - € 500) for that 6 month period (€ 7.50). The total payment for the second period is € 507.50
Are the interest rates the effective yearly interest rates?
Yes. The effective interest rates at Lendahand varies between 2-8% on an annual basis and are paid on the notional amount that is sent to the company. No interest is paid on amounts that have been repaid to the investor.
What is the maturity of the loans Lendahand offers?
Anywhere from 6 to 48 months in 6 month intervals.
Are companies allowed to repay the investments early?
When do I start receiving interest?
When do I receive my repayments?
How can I change my bank account number?
What procedure is there in case of restructuring and/or the default of an investee?
- In case of payments in arrear, a new payment schedule is drawn up (with or without other creditors) together with the investee. We also call this restructuring. In such situations, the interest that should be paid back in any month is in principle deposited into your wallet. For the notional amount, the following principle counts: the longest outstanding amounts will be repaid first. The new payment schedule will also be integrated into your My Lendahand environment.
- When an investee indicates that it is no longer able to meet its payment obligation, all investors become competing creditors, and should there be any return of funds, these are distributed pro-rata among those investors. In your My Lendahand environment the concerning projects are placed under Written-off investments.
Risks
What risks are involved with investing money via Lendahand?
The risk varies depending on the type of project and the borrower you invest in. Investments in financial institutions are partially protected. The risk of bankruptcy and currency fluctuations (for investments in euro projects) is largely covered by the financial institution. In addition, they spread the investment across multiple, diverse SMEs. Investing in a financial institution yields an annual interest rate between 4% - 7%. The credit score of these loans is A or B (on a scale from A to E). The historical write-off percentage since 2013 for this investment category is 0.37%. Of course, this is no guarantee for future investments.
Direct investments in companies carry higher bankruptcy risks not covered by an intermediary, thus higher than investments in financial institutions. However, currency fluctuations (on euro projects) are covered. Direct investment in a company yields an annual interest rate between 5% - 9%. The credit score of these loans is B (on a scale from A to E). The historical write-off percentage since 2013 for this investment category is around 5%.
In case of difficulties or bankruptcies of borrowers, Lendahand will do everything possible to handle outstanding investments to the best of its ability.
If Hands-on BV (i.e., Lendahand) goes bankrupt, all transactions between Lendahand and Intersolve EGI will stop immediately. Intersolve will then transfer the money in your personal wallet to your bank account.
This does not apply to money still outstanding with borrowers. In that case, Intersolve, in consultation with a curator, will handle all outstanding repayments to investors until the last repayment of the last project is done.
Have questions about the risks? Contact us at [email protected].
How does Lendahand minimize the risks for investors?
In addition to a social mission, every borrower must have a 'track record' proving they are a reliable credit provider for local SMEs. This means, for example, that they need a solid credit portfolio, sufficient buffers, and equity to absorb unforeseen setbacks. We also check the organizational structure of every potential borrower.
When currency exchange risk becomes too high for a borrower, Lendahand will urge them to cover these risks. In some scenarios, companies offering projects on the platform are contractually obligated to do so.
An extensive selection procedure and due diligence precede the financing received by companies through Lendahand. More information about the risks per project can be found on the individual project pages. However, these analyses are not investment advice.
More about the selection procedure
Lendahand only offers loans with a credit score of A or B (on a scale from A to E).
If you would like more information on the financial indicators we use, please contact us at [email protected].
Does Lendahand offer a guarantee to investors?
Despite our efforts to minimize risks, your investment is not guaranteed. There is a risk of partial or total loss of your invested money. Therefore, never invest money that you cannot afford to lose.
As part of specific campaigns, Lendahand sometimes offers guarantees under certain conditions up to a certain investment amount. Read the terms of the current campaign here for more information.
The Netherlands Authority for the Financial Markets (AFM) strongly advises not to invest more than 10% of your freely investable assets via crowdfunding. Furthermore, it is highly recommended to diversify investments across different borrowers.
What does the credit score mean?
The credit score, on a scale from A to E, reflects the creditworthiness and the likelihood of repayment by a borrower. It helps you, as an investor, to understand and weigh the risks before investing your money. Scores A and B indicate lower risks and are the only scores accepted by Lendahand, to maximize the chance of successful repayments.
About entrepreneurs requesting a loan
What interest rate do entrepreneurs pay?
We want to be the cheapest alternative for the companies that need funding. Providing mesocredits to entrepreneurs in often rural areas is a very labour intense process. It is comparable with the cost structure of microcredits. A huge number of loans with a relatively small size puts quite some administrative pressure on local partners. Also, these loans have to be monitored and obviously repayments have to be collected at the right time at the right place. Furthermore, partners have to pay local taxes and they have to take a provision at their balance sheet for possible non-repayments.
Since our SMEs do not have access to micro credits or bank loans, they often need to borrow from 'loan sharks' that may charge more than 100% interest per year. Even if they had access to micro credits, they would still be paying 30-50% annually. According to the New York Times (2010), the global average interest rate for microfinance loans is 37%.
On average, our SMEs pay around 1-3% interest per month. Lendahand will launch new propositions structurally for which the central theme is lowering the interest entrepreneurs have to pay.
Which criteria should entrepreneurs have to meet?
Our local partners screen applicants thoroughly. The potential client must be or have:
Our local partners will never finance the following projects:
What kind entrepreneurs can ask for a investment via a local partner?
Small and medium sized enterprises, 2-100 employees, in the area of farming, retail, wholesale, production or services. Applicants should have a 'moral compass' and have to prove they want the best for the enterprise, people, the community and the environment.
About local partners
Who are the local partners of Lendahand?
Our local partners are so-called NBFI's, Non-Bank Financial Institutions. These are financial entities without a banking license that provides financial services while under regional or national supervisory institutions’ supervision.
Local partner overviewWhich criteria do local partners have to meet to cooperate with Lendahand?
Every local partner must share our social mission to ensure local entrepreneurs can access affordable financing, allowing them to grow their business. A local partner must also have a 'track record'; they must have proven themselves as a reliable credit provider for SMEs. For instance, this means a solid credit portfolio and enough buffers and equity to compensate for unexpected downturns. We also check the organizational structure of the company and how robust their (internal) procedures are. Finally, the investments must be in proportion to the total balance of that company. A healthy balance between effectuating influence and being independent is crucial. If you would like to receive more information on the financial indicators we employ, please contact us via [email protected].
Are these local partners commercial companies or social enterprises?
One of the essential criteria Lendahand has regarding local partners is that they must have a social mission. If commercial gains are prioritized at the expense of social impact, an institution will not be considered for a partnership with Lendahand.
Do local partners investigate social impact?
Yes. Even though research on our investments’ impact is very time consuming and expensive, our local partners execute impact studies where they can. We also ask our partners to give an estimate of the expected effects when uploading a new request.
See impactDo your local partners pre-fund projects?
Yes. We believe this is important because many small companies need the money on short notice. For example when the company receives a large order and needs to hire more people. Lendahand has a 100% funding rate, however it is possible that a project has been pre-funded by the local partner but does not get fully funded on the Lendahand website. In that case, the local partner will use alternative sources of funding for that specific project.
About Lendahand
What is the impact of Lendahand?
Our mission is to fight poverty in emerging markets by investing in people and businesses. Our projects create new jobs in developing countries and enable families to gain access to basic needs.
See impactWhat is the remuneration policy of Lendahand?
Lendahand has a payment policy based on the Dutch Law remuneration policies of financial undertakings. The policy applies to all employees of Lendahand and is aimed at ensuring that employees rewards do not pose any undesirable risks and/or behaviour to the sustainability of Lendahand.
Remuneration
Lendahand pays all employees a fixed monthly income, which is not dependent on targets. Employees do obtain options. The management of Lendahand earns an average income of EUR 65,000 gross per year (2021).
We do not work with guaranteed variable remuneration
The decision on remuneration policy
The remuneration policy is drawn up by the management. Because Lendahand is a relatively small enterprise a remuneration committee will not be set up. However, the remuneration policy is aligned with the Supervisory Board annually.
Adjusting policy
The remuneration policy shall be reviewed at least once a year to determine whether the policy meets management’s requirements, the applicable laws and regulations, and investors’ interests. The types of remuneration that can encourage undesirable behavior will be examined and how the remuneration policy provides for appropriate action. If necessary, the assessment can be done more often.Why Lendahand?
Lendahand creates new jobs in emerging markets and enables people to improve their access to basic needs. This way, we contribute to the UN’s following Sustainable Development Goals:
1 no poverty
2 zero hunger
6 clean water and sanitation
7 affordable and clean energy
8 decent work and economic growth
The Sustainable Development Goals (SDGs) were adopted by all United Nations in 2015 as a universal call to action to end poverty, protect the planet, and ensure that all people enjoy peace and prosperity by 2030.
In which countries is Lendahand active?
Mexico, Indonesia, Kenya, India, Mongolia, Kirgizie, Moldavia, Peru, to name a few. Every year we add more countries to our portfolio, see our partner page.
What is the competitive advantage of Lendahand?
Lendahand is the only crowdfunding platform where you can invest in SMEs in upcoming economies and sustainable initiatives at an interest rate between 2-7% per year.
What is the business model of Lendahand?
Our borrowers (issuers) pay an average interest rate of 7,8% per year to Lendahand. Consequently we pay on average 4,25% interest to our funders. Our gross margin is around 3% (and maximized at 4%).
How does the legal structure of Lendahand work?
Possible debt instruments officially termed “Notes” are issued to the crowd (also called investors) when they want to invest via Lendahand. These notes are similar to bonds but cannot be resold.
The provider of the debt instruments to the public is called an ‘issuer.’ At Lendahand, these are either the financial institutions that finance the Small and Medium Enterprises (SMEs) in emerging countries, or entrepreneurs that raise capital on our platform themselves. Issuers only access the Lendahand website for projects when they comply with the admission requirement and quality standards beforehand. This includes the acceptance of the conditions for using the platform.
The crowd can select one or more projects (propositions) that he/she can finance by purchasing notes (or similar instruments) worth €50 each. Once the payment of the investor is successful, the purchase agreement is established. This agreement is entered under the condition precedent that the project (the proposition) will meet enough registrations. Investors accept the Terms and Conditions in which the purchase agreement takes part. Once the proposal is fully funded, the condition precedent is completed, and the notes are issued to the investors who have registered to the respective proposition. There are no exemption rights with regards to investments in requests. All investments are done via the website and are handled automatically and in order of entry.
What should I do if I have a complaint?
Download the complaint form.
How can I delete my account?
About creating an account
Why do I need to provide an ID?
Which documents do I need to provide?
In case of a personal account:
You need to upload a clear picture of your passport, EU ID card, or EU driver’s license, which holds all personal information, as well as your citizen service number.
Please upload a JPG or JPEG, not a PDF. If you choose to upload a scan of your ID with your smartphone, make sure your scan does not have any glares. Also, we ask you to upload a picture of yourself or take a selfie with your smartphone.
In case of a Business account we also ask for
Why am I being redirected to Onfido during the identification process?
Why are you asking for a selfie/picture?
About USD investments
Is the investment process the same as with EUR projects?
Is the repayment process the same as with EUR projects?
Can I have a separate USD and EUR wallet in my Lendahand account?
Do I need to create another account or wallet to invest in USD projects?
Is there a difference in interest rates and costs for USD projects?
Is there a difference in risks compared to EUR deals?
Do the local partners or iBanFirst hedge the currency fluctuation risks?
Most of our local partners hedge currency fluctuations against their local currency (in which they generate revenues and pay their expenses). Typically, Lendahand also agrees with the local partner the maximum amount of unhedged loans. With the USD loans, some companies will no longer have to hedge, as their local currencies are pegged to the US Dollar. This means they do not fluctuate against the USD (whereas they do fluctuate against the euro). iBanFirst could technically hedge the EUR-USD exchange rate up to two years, but this is something we currently do not offer.
What happens if the exchange rate goes down between the time I invest in a project and the time it gets fully funded? Will iBanFirst cover the exchange rate?
How do I know if I’m investing in a USD or EUR project?
At what point in time is the exchange rate determined?
What is the role of iBanFirst?
How does iBanFirst fixes the conversion rate?
Do I always get paid back in euros?
Is the interest rate entrepreneurs pay different from EUR projects?
Is the competitive advantage of Lendahand the same as for EUR projects?
About local currency investments
Who is TCX?
Which exchange rate applies for investments in local currency?
Why would a portfolio company choose or not choose for funding in local currency?
What is the role of the Lendahand FX Foundation?
Why are currency risks covered for investments in local currency and not for investments in USD?
The fluctuation risk between dollar and euro is easier to oversee and estimate than the risk between the euro and the local currency of an emerging market. The interest rate differential between euro and dollar is typically more limited too. The operational costs to hedge the euro/dollar risk are significant. In contrast, the risk over the maturity (maximum of 3 years) of a dollar project on the platform is manageable and limited. Therefore, we think it is a responsible choice not to hedge that risk and an investor can decide for themselves if he/she is willing to take the euro/dollar risk.
In the case of unknown and volatile emerging market currencies, we find that it would be irresponsible to leave the currency exchange risk to the investor. Therefore, we offer entrepreneurs the choice between financing in EUR, USD, or their local currency. If the entrepreneur chooses local currency funding, we hedge the currency exchange risk with TCX.
What does the partnership between TCX and KfW mean?
Just like with EUR and/or USD investments on our platform, as an investor, you risk losing your deposit when an entrepreneur defaults. The intervention of TCX and KfW, the German development bank, does not minimize or eliminate this risk.
TCX hedges the exchange rate risk on the local currency projects to make sure potential fluctuations and depreciation in the entrepreneur’s local currency against the euro don;t result in losses for the investor or the entrepreneur. KfW minimizes the risk TCX takes by guaranteeing potential credit losses on the currency exchange in case an entrepreneur defaults. In case of a default the KfW will pay the credit loss on the currency exchange to TCX. To make this possible, KfW is financially supported by the German Ministry of Environment, BMU.
In which case would the currency hedge contract with TCX not be valid?
There are certain cases in which TCX has the right to end the currency hedge contract for a specific local currency loan. For example, in case:
- a payment due from Lendahand FX (LHFX) to TCX under the currency hedge contract, due to non-payment by the entrepreneur, cannot be paid by LHFX for more than 180 days, and the loan and currency hedge contract are not restructured within that period to eliminate the late payment.
- LHFX and/or Hands-on BV fails to comply with certain information requirements, particularly regarding the timing and amount of payments received from the entrepreneur.
- LHFX and/or Hands-on BV changes owners, and TCX, for whatever reason, does not want to continue the contract with the new owner.
- LHFX and/or Hands-on BV loses its relevant licenses and/or otherwise seriously fails in its obligations to regulators (AFM and DNB).
- TCX is no longer considered solvent based on the agreements made with TCX's shareholders, including the Dutch government, and must be liquidated in which case all of TCX's outstanding contracts will be settled.
If TCX terminates the currency hedge contract for any of these reasons, Lendahand converts the outstanding loan into a euro loan. From that moment on, the entrepreneur runs a currency risk, which indirectly leads to greater credit risk for you as an investor. This conversion takes place at the exchange rate at that time. Exchange rate fluctuations that affected the outstanding loan are thus made permanent. When the entrepreneur repays the euro loan, a settlement still takes place with TCX so that you as an investor receive exactly your deposit and the agreed interest.
What risks does an investor face on local currency financing?
As an investor on a local currency loan, just as with a euro loan or dollar loan, you basically run the entrepreneur's entire credit risk. If the entrepreneur cannot pay the interest and/or repayment owed by him, the investor will not receive the expected interest and/or repayment either. However, this credit risk is in principle lower than with a euro loan or dollar loan. Since the entrepreneur is not exposed to exchange rate risk on loan, there is less risk of not being able to repay the loan because of a drop in the local currency's value.
Investing in a local currency loan does not expose you to direct currency risk; you get the euros you invest paid back in euros, with the corresponding interest in euros, as long as the entrepreneur pays back his loan.
Suppose, however, that TCX terminates the currency hedge contract between the Lendahand FX Foundation and TCX for valid reasons. In that case, the outstanding amount of the loan will be converted into a euro loan at the exchange rate at that time. The entrepreneur will then be exposed to currency risk on the euro loan from that moment on, and in principle, that means more credit risk for the investor.
The currency hedge contract with TCX covers the currency risk for the entrepreneur and investor; therefore, if TCX cannot meet its obligations under that contract, it could result in a loss for you as an investor.