Currencies

funding gap emerging markets

At Lendahand, you'll find crowdfunding projects in euros, US dollars, and local currencies. As an investor, you always invest in euros and are always repaid in euros. However, there are indeed differences between investments in euros, US dollars, or local currencies. We explain the differences on this page so you know exactly what you are investing in.

Why Different Currencies?

From South America to Southeast Asia and almost everywhere in between, through Lendahand you invest in projects worldwide. Therefore, at some point, a currency conversion to the local currency must take place for every loan we offer to a local business or financial institution. Some borrowers do this directly from euros, others prefer to do it from US dollars. After all, the dollar is the dominant currency in the financial world. By offering financing in different currencies, we enhance accessibility to Lendahand for a broader range of entrepreneurs.

 

Euro Projects

In Short

How Does It Work?

You invest in euros. As soon as the borrower receives the financing, they convert the euros into local currency. When the borrower repays a loan installment, they convert the local currency back into euros. The borrower typically takes out insurance against exchange rate risks themselves. The costs for the insurance and for the conversion are borne by the borrower. Thus, you do not pay any costs for this. The total costs for the borrower increase as a result.

 

Dollar Projects

In Short

How Does It Work?

You invest in euros. Once the project is fully funded by the crowd, the money is wired to the borrower. This happens on the first day of the following month. That’s the moment when Lendahand converts the euros into dollars and when your investment will start earning interest. 

The conversion costs are borne by the borrower. The borrower then converts the dollars into local currency and typically takes out insurance against exchange rate risks themselves.

To compensate for the exchange rate risk and conversion costs, we offer a higher interest rate of around 0.5%. Despite the higher interest rate, the exchange rate risk can lead to a higher or lower return. The costs for this conversion are borne by you and deducted from the repayment. These costs amount to about 0.30% of the repayment.

The exchange rate risk and the conversion costs are compensated by a higher interest of around 0.5%. The total costs for the borrower as a result of the currency conversion costs and the insurance against exchange rate risk increase as a result.

 

Local Currency Projects

In Short

How Does It Work?

You invest in euros. As soon as the project starts, Lendahand converts the euros into local currency. As soon as the borrower repays a loan installment, Lendahand converts the local currency back into euros. Lendahand takes out insurance against exchange rate risks.

The costs for the insurance and for the conversion are borne by the borrower. Thus, you do not pay any costs for this. The total costs for the borrower depend on the conversion rate and price at that time. The borrower does not face any exchange rate risk.

 

Overview of Your Investments in Different Currencies

How do you gain insight into the different currencies of your investments? The currency is listed with each project, just above the progress bar of the project. You know what you are investing in and easily diversify your portfolio across different borrowers and currencies. 

After making your investment, you can visit your Financial dashboard in your account, where you will find different tabs for your current investments per currency. It allows you to quickly get a clear overview of your current investments and their currencies. If you have any questions, please contact us at [email protected], we are happy to help you make an impact with your money.