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Lendahand Analysis

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Last updated in August 2022.

What is Lendahand?

Lendahand is a Dutch platform launched in 2013. It focuses on social impact investments by funding small business loans in emerging markets. It has funded €97.34m worth of loans to date - see Lendahand statistics for more historical performance insights.

Key Takeaways

  • Privately-held business backed by angel investors and €1.2m+ equity from the crowd
  • Funding of businesses in developing countries, also with the backing of local institutions or big donors
  • Investments make a good social impact and, as a bonus, allow investors to make a small profit and reinvest their capital.

Who is Behind Lendahand?

Koen The and Peter Stolze co-founded Landahand and hold management roles as CEO and COO.

Besides the team, which holds most shares, a few angel investors invested in the business early on. Additionally, in May 2020, Lendahand raised over €1.2 million from equity crowdfunding.

Lendahand is a for-profit company but doesn’t publish its financial statements.

Lendahand's Investment Product

Lendahand offers investments in loans for SMEs and entrepreneurs in over 15 emerging markets in Africa, Asia, and South America. There are three options:

  • Investing via local partners involves the distribution and management of funds by a local financial institution. The institution screens loan applicants and covers the risk of defaults and currency fluctuations.
  • Via a direct investment, you can support entrepreneurs with no third party involved. Most projects in this category cover the renewable energy sector.
  • Co-financing involves cooperation with a big skilful institutional investor and co-investing in projects (mostly in agriculture, housing and access to drinking water).

 Most loans mature in 18-36 months, with bi-annual repayments. Investments are offered in EUR or USD and typically come without collateral.

There is no auto-invest feature or a secondary market available.

How Much Can You Earn?

Lendahand’s public statistics page contains very detailed information about loan features and performance. Investors have historically earned, on average, a 3.42% return on investment (net of all fees and costs). Direct investments generally yield higher interest rates (4-7% vs 2-6% on investing with local partners and co-financing) but also higher risk.

Currently, the default rate stands at 1.2%, and about 8% of all loans are delayed. Lendahand charges a margin fee of approx. 2.8%. You can earn a  €25 cashback on the first €50 invested.

Other Considerations

Lendahand has won the Dutch Golden Bull award for the Best Crowdfunding Platform four years in a row (2018-2021).

The founders have always emphasised that Lendahand is not only about making money but helping out those in need. In 2016, they launched Lendahand Academy, which provides interactive training programmes for business owners in emerging markets. However, Koen The, in an interview with P2PMarketData, suggested that social impact investing might be becoming mainstream:

Social impact lending will become much bigger as large institutional investors begin to understand its potential and asset owners become increasingly aware that the fate of many people is in their hands.