Hendrik und President Addo

The fairafric bond

Posted on Posted in en, Stories, Uncategorized

The fairafric Bond

You have to admit, fairafric is no stranger to crowdfunding. With three Kickstarter campaigns, two crowd-equity raises, a crowd-loan and crowd-coupon (paying interest with chocolate) we thought we’ve seen it all. 


With a €5 Million factory to be build within a year, we dared to challenge the crowd yet another time. While banks in Europe have started to ask for negative interest, they are still expecting a social business to pay 10% for a loan to finance a job generation factory in West Africa. 


So banks receive 10% interest for a loan in Ghana. The money for the loan is provided by individuals. Those individuals however don’t get a cut of this interest, some are even charged a negative interest. That got me thinking. Why not cut out the bank and meet in the middle? Dozens of hours of research and lots of conversations later I realized there is even more regulation around borrowing money from the public than around bringing chocolate Made in Africa to Europe.


The obvious solution would have been to use a platform that brings together individual lenders and the company. What shocked me, is how much they are charging for the service. The well known platforms charge a fee of 15% plus a yearly charge on top of that. So if we collected €2 Million from investors on that platform and repaid over 7 years, more than €400,000 would need to be spent on fees. Of course, a company in need of funding and no one to turn to might accept that, but we have a big crowd ourselves, we only needed the legal part to be dealt with!


So another couple of weeks of research later I finally had the solution. A law firm with tons of experience with the regulatory setup in Germany loved our story so much, that they agreed to help us raise the €2 Million at a fraction of the cost the big platforms ask for. Instead of €400,000 the whole process has cost us less than €10,000 (including government charges), close to 50 times less. Or 393,000€ less! 


So off we went in early November with a simple offer: Borrow us money to help finance a solar powered, state of the art chocolate factory in rural Ghana where our organic cocoa beans are growing. We pay 5% interest over a 7 or 8 year period and you make social change happen. The response was overwhelming! Before Christmas we had collected more than €1 Million, in total we have raised close to €1.4 Million (through bonds, coupons and interest free loans) until late January with the campaign still being open until Fall 2020. 


For me this is really a wonderful story and it motivates me a lot more to work for interest payments to the wonderful people who helped finance the factory than for an anonymous middle men. Investors receive a 5% interest they are unlikely to get anywhere else today and know for sure that their money goes a long way in Ghana.

For anyone who is still (or now) interested to join the 400+ subscribers of our bond, here is where you can find out more and also subscribe: fairafric bond 2020



This website is advertisement for a bond for which a security information sheet (Wertpapier-Informationsblatt) was created. This sheet can be downloaded here. You are about to invest in a product which can be hard to understand.