Crowdfunding for financial inclusion

  • Florian GROHS, Symbiotics
  • Anaïs MORAUD, Babyloan
  • Koen THE, Lendahand
  • Pierre SCHMITGALL,
  • Thierry SANDERS, Mekar
  • Marloes NOPPEN, Plumseeds


Moderator Florian GROHS of Symbiotics opened the session with the statement that crowdfunding is still relatively small, but growing. Before starting with the presentations from the panellists, Grohs first provided further context on crowdfunding for microfinance. Worldwide, around USD 9.3 billion is disbursed through crowdfunding platforms, most of it in China. He explained that there are many different forms of crowdfunding: donation vs. investment, investment in equity vs. debt, retail investors vs. professional investors and local markets vs emerging markets. In the session, five different crowdfunding platforms with different types of clients presented concrete examples of this funding model.

Grohs outlined the opportunities and challenges from an investor’s point of view. According to Grohs, an advantage for investors is the possibility to invest in one deal instead of a whole fund. This way, it is possible to build your own portfolio. Another advantage is that investors can engage through social media and have more direct contact with the client. Apart from the advantages, there are also challenges for investors. It is not possible to sell the deal before the end of maturity and often, crowdfunding is still complicated because investors will have different investment in different platforms.

Thierry SANDERS of Mekar started the round of presentations. Mekar is a peer-2-peer lending platform that operates in Indonesia. Mekar is building a FinTech company in order to provide finance to the unbanked in Indonesia. They work together with savings and credit cooperatives to provide microloans to women’s small and medium enterprises (SMEs). Mekar does not lend directly, but sells the loans of these credit cooperatives on their own platform. Private, institutional and foreign funders invest in the loans on the platform. 

Koen THE presented Lendahand, a FinTech company that allows people from Europe to lend to SMEs in emerging markets who would normally have difficulties to access funding. Lendahand focus on SMEs because they are a big opportunity for job creation. The platform allows MFIs to issue loans to the crowd and the platform takes care of the administration. Once a project gets through the due diligence process, people can invest, starting from EUR 50 upwards, and when the project is fully funded, the SME will receive the loan. 

Marloes NOPPEN presented Plumseeds, a digital impact investing platform for professional investors. Professional investors are those who fall outside of retail investors, for example banks, asset managers and fund managers. Plumseeds issues impact bonds, which finance impact companies in emerging markets. It is possible to invest from USD 100,000 upwards, which is a lot bigger than the previous two examples, but a lot smaller than regular bonds. Over 80% of the bonds is directed to MFIs and SME banks or institutions that finance them. 

Anaïs MORAUD presented Babyloan, created in 2008 as the first European crowdfunding platform dedicated to the financing of microentrepreneurs. Babyloan is active in 20 countries and allows individuals to lend to the project of their choice. Lending starts from EUR 10 up to EUR 2,500. Babyloan creates partnerships with MFIs who grant the loan to microentrepreneurs online. When an entrepreneur is not able to re-pay the loan, the MFI covers this risk for the investor. This risk is low because the reimbursement rate is 98%. 

Pierre SCHMITGALL presented, a European investment platform dedicated to social businesses. has a double mission to democratise responsible finance and help social and environmental entrepreneurs to better access long term and sustainable finance. Their target investors are retail investors, family offices or institutional investors. The financial instruments they use are equity and
quasi-equity shares and innovative instruments such as green bonds.


Grohs asked the panellists if they thought crowdfunding would remain a niche or if it will grow in the future, and which challenges need to be overcome. Koen The from Lendahand responded that crowdfunding is going to be bigger in the future. According to Grohs, people are increasingly getting more worried about how banks spend their money, especially the millennial generation. Crowdfunding is a way to have more direct control on how your money is spent. The challenge is to find more investors and to get better projects on the platform. Lendahand does not want to compromise on quality, but notes it is not always easy to find enough good projects to present on the website.

Schmitgall agreed with The, and added that there are two major challenges. The first is how to work closely with existing financial institutions. The second challenge is to work with regulators because there is a lot of regulation on equity finance, especially with taxation. This knowledge is not always accessible for every investor. Noppen argued that impact investment is growing, but that a lot of investors are struggling with how to do it. She argued that Plumseeds can help those investors. A challenge is that institutional investors are also regulated, so the risk for institutional investors is more difficult to understand. 

Moraud did not agree that crowdfunding is a niche. According to her, the market is growing. She especially experienced a lot of interest from the younger generations. She identified their biggest challenge lies in being a social organisation which at the same time makes a profit. Sanders identified the mentality of Indonesian investors as another major challenge. These investors do not always understand what impact investment is and why they should invest in it. The aim of Mekar is to slowly educate people that you can use money to do good. Sanders also agreed that regulation is a big challenge. In Indonesia the regulators are still grasping the idea of peer-2-peer lending and crowdfunding. And rules are changed almost every week. 

Grohs then opened the floor for questions from the audience. A first question was raised on the issue of microfinance and savings. According to literature on microfinance, savings are more effective for poverty reduction than providing micro-credits. The question was how the panellists related to this literature on poverty reduction. Sanders responded that in the Indonesian context, banks are only accessible for 40% of the population. Most people save their earnings through savings or lending cooperatives. This is also common in African countries. Sanders identified a big demand for managing these group savings activities. Mekar was initially created as a peer-2-peer lending platform but it is now also going to launch savings functionalities for savings groups. 

Another question from the audience was raised on how the platforms manage the foreign exchange risk. Koen The from Lendahand responded that at the moment, this risk is for the investors. When a change in regulation causes a currency to devaluate, the end borrower will pay for this. According to him, this should not be the case and they are working to solve this issue. They have set up a small foreign exchange fund to cover potential losses to a certain extent.