Lendahand.com

You’re looking at an old review of Lendahand.com. For an updated version, including long-term performance report, check out the 2025 update.

Crowdfunded loans for small businesses in developing countries.

How sustainable investing through Lendahand creates Impact

Lendahand.com is a Dutch platform for crowdfunded impact investing and not to be confused with lendahand.co.uk, also known as “Energise Africa”, although they are connected. Lendahand state their mission as “creating new jobs for companies in emerging countries and enabling people there to improve their access to basic needs. This way we want to alleviate poverty.” Perhaps more even than other providers of products for impact investing, Lendahand appears to be a thoroughly social enterprise. Their primary goal is to create jobs in developing countries. If you scroll through their list of active or upcoming projects, you will notice that this gives you the opportunity to invest in the tiniest of enterprises or local cooperatives. Projects also cover an impressive geographical range, with regular new projects from Uganda, India and Mongolia.

Lendahand achieves this by working together with “Local Partners” for the majority of their projects. These are local banks which acquire and evaluate potential borrowers. While investing in such a project means sacrificing return, it’s also lower risk, since the bank will cover the risk of a borrower’s default. Investments through local partners will yield interest of around 3-4%. With “Direct investments”, however, Lendahand skips the middleman and funds a borrower directly. The increased risk is rewarded with higher returns of around 4.5-6.25%.

If they can offer projects for investing that will produce additional benefits as well, great! But you will find other investment campaigns on offer that perhaps don’t tick all the boxes of sustainability. Greener-than-grass investors will probably hesitate to provide a Mongolian entrepreneur with the money to buy a new lorry for his rental business. But if development is your focus, why not go for this kind of loan – the lorry of the loan in question was to be used in constructing infrastructure.

What I see as a big plus favouring Lendahand as your impact investing partner of choice is their transparency. The loan portfolio page basically provides you with a direct glance into their books – including the amount of “bad debt” they have and even their own margin. Bad debt are loans which will probably not be repaid for whatever reason. This gives you a good idea of the net return after losses you might expect, currently 2.28% on average. That’s not very much at all, but at least you get an idea – and the impact should count for something as well! Talking about impact: Lendahand publishing their margin of 3.28% is very unusual. Theoretically, comparing platform margins should allow you to favour low-margin platforms where borrowers also benefit from cheaper loans. But since other platforms (to my knowledge) don’t publish this kind of information, there is no way of knowing if 3.28% is high or low without expert knowledge.

Terms

Depending on loan type, returns are 3-4% for lower risk “Local Partner investments” and ca. 4.5-6.25% for “Direct Investments”. Durations range from short-term loans of six months to several years. A few projects are even partially covered by an investment guarantee issued by the Swedish Development Agency, SIDA.

Usability

Lendahand features an up-to-date website which provides you with good insight into your portfolio. Pie charts show your exposure to both individual countries and counterparties, i.e. Local Partners and direct investees – useful if you want to spread your loans over several counterparties or countries.

You also get an idea about the impact your investments generate under “My Investments”. Each project will list its impact on job creation, CO2 reduction or power production. The figures are somewhat misleading, however, as they show the projects total impact, rather than breaking it down to your individual investment’s.

One particular quirk I noticed is caused by the sometimes tiny investment size of some projects. Campaigns to fund projects worth only €40’000 can be found quite regularly and are often completed within a few hours. That’s probably why Lendahand gives their users a few days’ notice before the start of a new project. And don’t worry if you miss an interesting one, new projects can be found every few days or every other week.

My experience with Lendahand

I have been invested with Lendahand since 2018 and my experience has been positive. There have been no defaults in my portfolio so far, although an important local partner in India was having difficulties this year due to Covid-19. The performance is modest, but as advertised.

Lendahand.com: Pros and Cons

• Pro: high transparency about their portfolio’s performance and structure creates trust
• Pro: Impact investing in the truest sense of the word. Most borrowers would probably struggle to receive funds through other channels, or at much higher cost
• Pro: limited risk through their system of local partners
• Con: Investment opportunities not always availabe. Their small size means they are fully funded very quickly and it can take a while until new opportunities are online, meaning you have to check the page regularly.
• Con: Low returns for most investments, although still higher and with more impact than in a savings account. Some projects offer higher returns, but at the cost of higher risk.

Category	Crowdfunded Loans, fixed return
Country of origin	The Netherlands (offers are denominated in Euros, with offers denominated in US Dollars coming soon)
Geographical focus	Sub-saharan Africa and Asia
Minimum investment	€50 per project
Cost	None for investors. Lendahand takes a cut of the interest payments received by the investees or local partners, depending on the project.
Referral programme	Both the inviter and the invited receive a € 25 credit. If you don’t have a friend already investing with Lendahand, you can use my code when signing up to support this blog: TED9-PWGE-D2AH
Similar offers	Trine (see Review) Abundance Investment (see Review) OnePlanetCrowd (Review coming soon) Energise Africa (operated by the same parent company as Lendahand.com)