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:
- Microfinance Institutions (MFIs): committed to assisting typically poor households and small entrepreneurs.
- Digital Lending Platforms (DLPs): enabling medium-sized enterprises in emerging markets to grow and create local jobs.
- 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?
- Entrepreneurs: They receive financing from the financial institution, impacting everyone who touches their business, such as their families, communities, employees, clients, and suppliers.
- Financial Institutions: Microfinance Institutions or Digital Lending Platforms in emerging markets are enabled to continue their activities.
- You as an investor: Earn a financial return and grow your investment portfolio while doing good by creating a positive impact.
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?
- Local communities:
- Families and local businesses receive access to clean energy solutions, in case of an investment in a clean energy company.
- Smallholder farmers gain access to either agricultural inputs to obtain a better harvest and a higher income, or access to market which allows them to increase income, in case of an investment in an agriculture company.
- Businesses: They receive the opportunity to grow, employ more locals, and contribute to uplift local communities with their activities.
- You as an investor: Earn a financial return on your investment and grow your investment portfolio while backing solutions for a better tomorrow.
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:
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?
- Local communities:
- Families and local businesses gain access to clean energy solutions by investing in a company in this sector.
- Small-scale farmers can increase their income. Thanks to companies in the agricultural sector, these farmers gain access to the market and to the necessary agricultural aids that improve their harvest. A better harvest also means a positive effect on local food security.
- Businesses: they get growth opportunities, can hire more local workers, and contribute to improving local communities.
- You as an investor: you receive a financial return and expand your investment portfolio while also making a measurable impact (for example, the number of solar panels or biogas digesters installed).
