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Daniel van Maanen -
CFO Lendahand
"Using technology, Lendahand can make more impact."
Financial Institutions
Imagine you don’t have a bank account because you just don’t have enough money to use one. How will you improve your financial situation?
Financial inclusion provides people with more options and tools to manage their day-to-day funds, respond to emergencies, and seize opportunities. A good financial situation protects people in times of crisis and enables them to build for the future. According to the United Nations, more than 200 million small and medium-sized enterprises in emerging markets lack access to finance. This problem limits their ability to thrive.
When small entrepreneurs are not registered at a financial institution and operate in cash, they cannot present formal records of their transactions and revenues. Banks deny their loans, making them turn to loan sharks who charge them annual interest rates of up to 180%. Access to financial services and better financial literacy empower entrepreneurs and business owners to make better business decisions. It helps them invest capital and grow their businesses. This results in more income, job creation, and economic prosperity. And hopefully, will enable them to work their way out of poverty.
Impact highlights
Queen Maxima, in her role as the United Nations Secretary General Special Advocate, on financial development and inclusion in emerging markets:
Microfinance Institutions (MFIs)
Is the microfinance concept worth winning a Nobel Peace Prize? Absolutely, pioneer Muhammad Yunus won the prestigious prize in 2006 for providing capital to entrepreneurs who are often starved of financing. He showed that with necessary means, even poor entrepreneurs could start a business and work toward financial independence.
Entrepreneurship is the fundamental basis of the microfinance approach to poverty alleviation. To contribute, Lendahand guides small and medium entrepreneurs in emerging markets towards local microfinance institutions. These MFIs can give them an affordable loan, helping them become formal entrepreneurs, and leaving the informal economy behind. With suitable financing services, these entrepreneurs improve the local economy, create jobs, and leave poverty behind.
Anshul Jindal -
Head of Investments at Lendahand
"How can you reach the small entrepreneurs and farmers in rural areas in emerging markets, all the way from The Netherlands? Through the local presence of microfinance institutions, we can reach the so-called Bottom of the Pyramid.
Bettering the lives of their borrowers is the mindset of microfinance institutions. Many MFIs also give back to the community by funding health infrastructure and schools. Their human approach creates a huge social impact. While Lendahand wants to make an impact first, our investors' capital needs to be safe. So we always search for the right balance between the two.
The growing microfinance sector is constantly evolving. Mobile money will replace the collectors who today go in the field for loan repayments, which will lower the operational costs for the MFIs in favor of their borrowers. Technology will play an essential role in improving the sector in the near future."
Company Profile
EFC in Uganda
Entrepreneur Financial Centre (EFC) supports a wide range of entrepreneurs and agricultural cooperatives within different sectors in Uganda. Their loans enable job creation, working capital, and working material for underserved SMEs, allowing better living and working conditions within local communities.
“EFC has been the finance partner for my farm since last year. I started the farm in 2012 with 180 birds, and I am slowly growing it to 25.000 birds. The financing allowed me to build better and safer infrastructure to allow the sustainable growth of my farm."
- Tayeba Richard Gouma
Digital Lending Platforms (DLP)
Short loan periods, less or no collateral, lower risks. Where to find such loans? Digital lending platforms use fintech to reach a different space. They do the same as microfinance institutions but use technology to operate more effectively and flexibly. These platforms are able to give out loans quickly and on-demand, which allows them to reach enterprises in need of small loans.
In the (near) future, the lines between microfinance institutions and digital lending platforms will blur. MFIs will need to implement technology to lower their operational costs and keep reaching the people who need it most.
"Using technology, Lendahand can make more impact."
"Small and medium enterprises in emerging countries are the driving force behind job creation. They have the ideas and vision to start businesses, but lack funding. The MFIs and Digital Lending Platforms in our network make sure SMEs get access to that money.
Digital lending platforms are efficient, data-driven, and make quick lending decisions. They get hundreds of thousands of small loans to the small businesses on the ground. Lendahand is working on keeping a direct connection with these entrepreneurs by specifically delineating our projects. This will allow us to trace impact and funding conveniently.
With a more speedy and automated process, Lendahand will be able to offer cost-effective financing, allowing us to reach small and medium-sized businesses and remain an interesting party for financial institutions."
Daniel van Maanen -
CFO at Lendahand
Kelvin Teo -
CEO Funding Societies
"Funding Societies and Lendahand share the same goals of contributing to societies in emerging markets through financial inclusion. This alignment brought us together. Because of funding, 50% of our borrowers have grown their revenue and 11% of them have expanded their staff. We hope to continuously support SMEs in their growth journey through financing and digital services."
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Ton -
Investor and entrepreneur
"An entrepreneur does not want a present, he wants to borrow and is proud to repay a loan. Other than when receiving money, with a loan you will do your utmost best."
