Ethical investment platform Charm Impact is conducting a fundraising round in preparation to launch into the peer-to-peer lending space as an appointed representative (AR) of Rebuildingsociety.
The firm, which is currently unregulated, has exceeded its £100,000 equity fundraising target on Crowdcube by raising £123,610 so far.
After the campaign ends on 28 October, it will look to spend some of the funds on launching into the regulated P2P space by operating under Rebuildingsociety’s regulatory umbrella.
Charm Impact provides peer-to-business loans for clean energy projects run by early stage entrepreneurs in developing markets to fight climate change and poverty.
It connects UK investors with companies in Sub Saharan Africa, South Asia and South East Asia, offering target returns of up to eight per cent.
Read more: Ethical property investing
“We saw a huge gap in the market, there’s a huge push for sustainable development goals in the world,” said Gavriel Landau, co-founder of Charm Impact.
“About 1.8 billion people lack access to electricity or are connected to an unreliable grid and estimates show there’s at least a $450bn (£349.3m) investment gap for ensuring everyone globally has access to electricity.
“That’s a startling statistic and we saw there’s a really phenomenal number of entrepreneurs in developing markets running businesses on providing clean energy to communities.
“There is lots of excitement around P2P lending. We’re enabling people to earn money whilst making a difference in the world and giving full transparency to show them where the money goes.”
Read more: 5 reasons to invest in P2P
“They have a decision in principle with us and conditions to satisfy which they are making significant progress towards,” said Daniel Rajkumar, managing director of Rebuildingsociety.
“Once they demonstrate them, we’ll be happy to onboard them.
“We particularly like their impact side of P2P lending. There aren’t many platforms that appeal to those investment motives, so we think they have a good appeal and market opportunity.”
Charm Impact’s loans are funded by a combination of retail, high-net-worth and institutional investors, as well as philanthropic foundations which take the first loss on loans.
Landau said many of Charm Impact’s borrowers have been impacted by Covid-19 as the customers of these companies are some of the poorest in the world.
The platform gave a zero per cent interest payment holiday for some borrowers for a few months that were struggling due to global lockdowns.
However, Landau said Charm Impact has seen no defaults, all of its loans have resumed repayments as normal and since the outbreak, it has launched three new loans.
The platform currently has five live loans listed.