Atradius DSB, Lendahand and Carabus have joined forces to launch a new financing model, offering European retail investors full guarantees on their investments into social impact projects in emerging markets.
Atradius DSB, Lendahand and Carabus have collaborated on the launch of a new financing model aimed at boosting retail investment into social impact projects in emerging markets.
The tripartite agreement will see Atradius DSB, the Dutch government’s export credit insurer – which has provided insurance for the international trade operations of Dutch companies since 1932 – offer guarantees on 100% of the capital invested into projects promoted by Carabus on the Lendahand social impact crowdfunding platform, which launched in 2013.
Lendahand offers retail investors the opportunity to invest into social impact projects that provide loans to microfinance and financial institutions, SMEs and entrepreneurs in emerging markets, as previously reported by this publication, while Carabus is an independent Dutch company set up to finance the export of sustainable energy products to emerging markets. The aim is to protect retail investors against the risks associated with exports to politically and economically vulnerable markets.
The first of these projects is with Spark, a Dutch B2B small to medium-sized business enterprise that provides off-grid solar installations, and will support the export of solar home installations to its partner Greenage Africa, a renewable energy service company, in Nigeria.
Speaking to Impact Investor, Daniel van Maanen, CFO of Lendahand, said: “The project with Spark in Nigeria is the first pilot project using this financing model. Spark has customers in 18 different sub-Saharan African countries and if the project is a success, we hope to finance many more export contracts with them in the future in countries such as Zambia, Zimbabwe and the DRC.”
Rebuilding trust
Van Maanen explained that Lendahand had set up Carabus as an independent intermediary company to finance the credit lines offered by exporters of sustainable products and services to customers in emerging markets in order to guarantee investor capital and rebuild trust with its investor base.
The way the model works is that the exporting company – in this case Spark – offers its B2B emerging market customers, such as Greenage Energy, loans to pay for their goods and services, and agrees to be paid back in six-monthly instalments through a set of six bills of exchange.
Since its launch in 2013, over 16,000 investors have invested more than €140m into over 3,000 projects via Lendahand’s platform. The platform, which focuses on supporting companies and projects that promote social impact through economic growth, gender equality and clean energy, said it would be working with Carabus to expand into other impact sectors, such as clean cookstoves and water purification systems, and offer similar guarantees on investment with the support of Atradius DSB.
“We would like to finance many more export contracts with Spark, but would also like to support other Dutch exporting businesses such as clean cooking suppliers, water filter producers or e-bicycle manufacturers. We’d be happy to work with any Dutch exporter that exports to emerging markets and can demonstrate a socially impactful business model.”
Van Maanen said Lendahand hoped to scale the new financing model to account for at least 20% of the platform’s activity in the near future.
“We are aiming to finance around €2m through this structure in the first year starting with off-grid solar and Spark. We also expect to onboard at least two new exporters in 2025 and to generate around €10m in loan volume per year in the future,” he added.
