Crowdfunding: what changes for Babyloan lenders, acquired by Lendahand

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Capital: Why did you decide to sell? Babyloan ?

Arnaud Poissonnier: The economic model of our platform has not made it possible to sustain our activity. The scheme which consists in proposing solidarity loans, without interest, is not profitable. And it has been known for several years that it was in danger.

Capital: Wasn’t the 2020 launch of impact lending a game-changer?

Arnaud Poissonnier: With the late 2020 launch of Babyloan Impact, we found a potentially profitable model. And this is very easily explained: on this paid loan, savers invest an average of 1,500 euros, ten times more than in the solidarity loan, considered as philanthropy by our members, the Babylonians.

However, the time to develop Babyloan Impact and put it online, its release arrived in the midst of the Covid crisis. So we launched it too late.

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Capital: Have you also been affected by the Covid-19 crisis?

Arnaud Poissonnier: It’s obvious. For seven to eight months, the microfinance institutions with which we work did not reimburse us and, therefore, the money did not go back to the Babylonians. Admittedly, we did not experience any breakage, but during this period, the money not returning to the lenders, the latter no longer lent, which greatly reduced our income.

Above all, we have been very impacted on our B to B activity. We had contracts with a certain number of large French companies, such as Danone or Accenture, which widely disseminated Babyloan in their ecosystem as well as to their employees as part of their policy. CSR (social and environmental responsibility, editor’s note). But everything stopped because of the crisis.

In total, we lost 30% of turnover in 2020, knowing that we were already suffering losses. The Covid-19 has therefore, in a way, been the coup de grace.

Capital: How did you choose Lendahand?

Arnaud Poissonnier: At the beginning of 2021, we said to ourselves: “Either we stop everything, or we get bought out.” I interviewed around twenty crowdfunding and social economy players. Four of them were interested. But three months later, no discussion had succeeded. It was at this exact moment that I contacted Lendahand, our main competitor. A year of discussion was necessary before the formalization of this takeover.

Capital: What is your assessment of the Babyloan adventure?

Arnaud Poissonnier: We put the site online in the summer of 2008, which makes it the oldest active French crowdfunding platform. In 14 years, the Babylonians have made 30 million euros in solidarity loans, which has made it possible to finance the activity of 50,000 families, or around 250,000 people, in around thirty countries. It’s a real pride.

On Babyloan Impact, between end of 2020 and 2022, we collected 350,000 euros in remunerated loans. It is therefore much less, given that in the summer of 2021, we announced to our lenders that we were in financial difficulty. Despite a call for donations to which our community responded incredibly by supporting us massively, the activity then logically slowed down and the dynamic stopped at the end of 2021.

Capital: What will happen to the Babylonians?

Arnaud Poissonnier: For the moment, nothing changes for our lenders because our site is still online. It is between the months of September and December that the respective communities and tools of Babyloan and Lendahand will merge. From this period, Babyloanians’ accounts will be switched to Lendahand, and more specifically to the impact-paid loan. Their savings will therefore be entirely allocated to social projects in developing countries, with remuneration.

The interest-free solidarity loan from Babyloan will therefore disappear. But if our lenders refuse the paid loan, they will be offered to go to PlusPlus, the equivalent of our interest-free solution, at Lendahand.

Capital: And on the remuneration side, what should lenders expect?

Arnaud Poissonnier: On the Lendahand platform, the French version of which was put online about twenty days ago, the interest paid varies between 3.5% and 4.5% gross. The remuneration is therefore identical to that offered on Babyloan Impact.

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