How does liwwa work?

Small businesses often lack access to fast and uncollateralized capital which is crucial to growth. Meanwhile, many investors aim to realize a regular monthly return on their investments. We pioneered our marketplace lending model to address the borrower's demand for capital as well as the investor's demand for portfolio diversification and superior returns.

How it works for Borrowers

Reema wants to grow her artisanal soap business by acquiring a new van to transport the soap to retail stores around Jordan. She approached banks to help her finance the acquisition, but they either rejected her application, required too much collateral, or took too long to respond to her.

Reema decided to register on as a borrower and, within 48 hours of submitting her complete application and required documents, she received the approval of the credit committee. Within 5 days of the approval, she signed the contract and liwwa issued the funds to purchase the van.

Once Reema took ownership of the van and began operating it, she issued monthly payments to her investors through the liwwa platform over the loan term period (12 months in this case), and liwwa assessed a service fee on each payment.

How it works for Lenders

Mohammed has inactive funds that he usually places in his deposit account at the bank. Those funds only earn him around 3% annually. Seeking to invest his savings for higher yields, Mohammed registered on as an Investor and added $1,000 to his liwwa account.

Deciding to diversify his liwwa portfolio, he invested his $1,000 evenly across 50 different campaigns, representing 50 different small and medium-sized enterprises (SMEs). Thus, his exposure per campaign stood at around 2% of his portfolio. Mohammed chose these campaigns based on his risk appetite, taking into consideration the risk of default linked to the credit score assigned to each campaign. Mohammed understands the investment risks associated with these campaigns and understands that he may lose some or all of his investment amount in a campaign if it defaults.

Each campaign has a specific rate of return, which determines the amount of each monthly installment that Mohammed collects over the duration of the loan. In 2017, liwwa had an average IRR of 10.61%. To maximize returns, Mohammed makes sure that he routinely logs into his liwwa account to invest repaid amounts in new campaigns.