Lendahand-Ethex Ltd select businesses very carefully. Lendahand-Ethex Ltd do a full credit risk assessment of each business, with the support of INRISC – a provider of tools to measure and monitor credit risk. Some projects will have a first loss provision meaning that if the business cannot repay moniues invested into it, for example in the case of bankruptcy, these funds will be used to underwrite part of your loss.
The solar businesses cover the risk of any currency fluctuations. Energise Africa has a small fund that can be used by the business to offset up to 20% of any currency loss. Overtime, this fund is to be topped up by the solar companies themselves with 10% of their payments going directly to the FX reserve. This ensures a sustainable approach to covering risks for investors.
If you are providing more than one loan, it is advisable to reduce your risk by spreading your money across different businesses. You should never invest more than you can afford to lose. If you have any concerns about whether this type of investment is suitable you should consult a professional financial advisor.