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What are the financial guarantees and how is risk mitigated?

As a crowdlending platform, we bring together promoters (companies, NGOs, social institutions) that need financing (borrowers) and investors (private or institutional actors) who are looking to invest (creditors).

Investing in this type of product carries certain risks, including:

• Credit risk: when the promoter fails to repay the loan to investors;

• Operational risk: when the project fails due to technical issues;

• Market or sector risk: when economic changes affect the success of the project.

To reduce these risks, we follow a rigorous risk assessment process before a project is approved for funding. The protocol is divided into three steps: project admissibility criteria, statistical credit model, and technical project assessment. You can learn more about our risk assessment model here.

In addition, we apply extra risk mitigation measures on some projects. These are activated if the promoter defaults on their obligations. Examples include:

• Equipment pledge: if the project fails, the installed equipment can be recovered and sold to help repay investors.

• Personal or corporate guarantee: a third party (e.g. a shareholder or parent company) ensures payment.

• External co-financing or non-repayable funding: another entity supports the project financially, lowering the investor’s exposure.

Please keep in mind that investing in a project means lending money to an organization, and this involves risk — including the possibility of losing part or all the capital invested.