Frequently Asked Questions
What is liwwa?
liwwa is a peer-to-peer lending network, which connects borrowers to investors by creating an online credit marketplace. Borrowers can access capital while investors earn regular monthly returns on their investments. Borrowers can apply for small business loans online in ten minutes or less. We conduct a credit assessment before hosting to our website - liwwa.com. From there investors are permitted to invest directly in the small business loans that appeal most to them. For a detailed explanation of the liwwa.com transaction structure please see our How It Works page.
Who are liwwa's customers?
liwwa serves two primary customer bases: investors and borrowers. Our investors are individual and institutional lenders who want to grow and diversify their investment portfolios while helping grow the local economy. Our borrowers are small-and-medium-sized enterprises (SMEs) that want to access capital quickly, efficiently and on reasonable terms.
What types of small businesses does liwwa serve?
liwwa is available to all types of small businesses in Jordan so long as their business operations are managed ethically.
Can I raise money through liwwa to fund operations or pay salaries?
No, liwwa is only capable of funding small business assets and trade goods. That's because the funding model relies on an asset exchange to work - a qualifying characteristic of Islamic financing. So while we can’t help you pay your painters or the plumber, we can help you buy the paint and the pipes.
How lending works
Once we receive your loan application, our team will reach out to collect the needed documents and conduct a site visit to your business. Then our credit team will study your loan application and provide a decision within 48 hours.
What types of investors does liwwa serve?
liwwa serves retail and institutional investors. Retail investors are those looking to grow and diversify their investment portfolios by investing in a new asset class (loans to SMEs). Institutional investors are financial institutions and other funds that are similarly looking to diversify and grow their investments by utilizing liwwa’s efficient technology platform.
Can anyone invest? Why are some investor registrations declined?
No, liwwa only accepts qualified investors from the MENA region countries where regulations allow this type of investment, and Malaysia.
Unfortunately, USA, UK and EU citizens and residents cannot currently invest through our platform. This is for regulatory reasons and we hope to make lending available soon to potential investors from those countries and others.
How does a potential investor register on the platform?
Our registration process is straightforward and only takes a few minutes. In order to minimize risk, we recommend that potential investors have a basic level of financial acumen and that they do not invest more than 10% of their annual income. You can register here for an investor account.
What is the minimum / maximum an investor can fund?
Laws require that we collect information from you to verify your identity to comply with international anti-money laundering rules and to protect our customers. Please register as an investor and complete the form available through this link to proceed with your verification request. We remove the $2000 cap from verified and approved accounts. For any questions, please email email@example.com.
What information do I need to provide on the KYC form?
As part of the KYC process, we ask you to provide us with basic information about yourself, such as your date of birth, phone number, country of residence and country of taxation. We also ask for financial information such as your annual income, liquid net worth and primary source of wealth. Additionally, we require copies of your passport and identity card (in the case of non-citizen residents of a country). These KYC procedures have been designed to comply with international anti-money laundering rules. Please note that you can return to the KYC form at any time to update your information.
Are liwwa loans fully funded by retail (i.e., individual) lenders?
No, liwwa loans are funded through the participation of diverse lenders. liwwa always takes a balance sheet stake in loans on its site. Several bank partners also lend through liwwa.
It is worth noting that bank lenders may require more information about a borrower than retail investors are provided with. Moreover, bank lenders have access to Central Bank databases which allow them to conduct independent reviews of borrower creditworthiness.
How much does an investor earn and how does he/she get repaid?
A liwwa loan typically pays an investor 15% to 18% IRR p.a. after liwwa fees (each campaign has fees ranging between 1-4%) are deducted. Investors get monthly reports detailing their earnings. They can also check this information at any time in their Dashboards. The investor is repaid on a monthly basis as the borrower repays their loan on a fixed schedule. If the borrower is late on a payment, we will work to get the payment from them and will send the investor the payment when it is received.
For more information on how we calculate the IRR, an industry-standard method for calculating returns, please see this explanation.
How are monthly payments transferred from borrowers to investors?
Borrowers make monthly payments that are then deposited into the investor’s account on liwwa’s platform. The investor can choose to either reinvest their money in new campaigns or withdraw the funds to their bank account.
How can an investor deposit funds into his/her liwwa account? Is there a fee?
Investors can fund their account via bank transfer by following the instructions shown in the Add/Withdraw Funds section of their liwwa account.Wire Transfers:
• For wire transfers less than $1,000.00, liwwa will add the amount that is received in liwwa’s bank account to the investor’s available funds, regardless of the initial wire transfer amount.
• For wire transfers of $1,000.00 and above, investors are required to provide proper documentation of the initial (before fees) wire transfer amount, and that initial amount will be added to the investor’s available funds.
How can an investor withdraw money from his/her liwwa account? Is there a fee?
Investors can withdraw funds by logging into their liwwa account and clicking on the Add/Withdraw Funds section of their dashboard. You will be prompted to upload a copy of your passport before filling in your bank account information. Please note that wire transfers may take approximately 5-7 days to process.
For your first three withdrawals, liwwa currently covers the $45 fee it incurs from banks for outgoing wire transfers. For any subsequent withdrawals, you will be liable for paying the fee, and this will be shown on your transfer request. Your bank may also charge a separate fee for accepting the transfer into your account.
How does liwwa make money? What fees does liwwa charge?
Unlike other financial institutions that have an array of hidden fees, all of our fees are transparent. liwwa generates its revenue from a service fee on successful loan payments and that fee is visible to investors for each campaign. This aligns our incentives with that of the investors, so investors will only be offered the best and safest loans.
The only other fee an investor may incur is a wire fee that the bank charges for withdrawing funds from an investor’s liwwa account. The first three withdrawals are covered by liwwa and free for the investor, but any subsequent withdrawals must be paid for by the investor.
Given loans in a particular risk category, why does liwwa’s fee vary on a case-by-case basis?
liwwa’s fees vary depending on the tenor of the loan. For example, liwwa will charge a higher fee for a low-risk loan with a twelve month repayment period, than for a low-risk loan with a six month repayment period.
How do investor returns through liwwa compare to other market opportunities?
Why does the number of campaigns available for pledging on your site change at times?
We only list the borrower applications that we feel are most secure and credit-worthy. As the volume of borrower applications fluctuate, we may have more or fewer borrowers listed on our site, because our standards for listing campaigns remain high whether we get many or few applications.
What happens after investors pledge the full amount that a small business owner is trying to raise?
After a small business asset has been fully funded, liwwa purchases the asset and provides it to the small business owner. The asset is owned by liwwa for the duration of the repayment period. But once the asset has been paid for in full, it becomes the property of the small business owner. This process works similarly for the financing of trade goods as long as they are inventoried- however, once a good is sold, liwwa can no longer claim ownership over it.
What does the "grace period" mean?
The grace period is a duration of time that allows borrowers to make their first payment after they have received the goods/assets. This is intended to give the borrower additional time before paying his/her first installment. For the investor, the grace period does not change the terms of the investment – the first payment date highlighted to investors is when investors should expect to begin receiving repayments.
How do I find out if the borrower has taken out more than one loan from liwwa?
If the borrower for a campaign hosted on the website has previously borrowed money through liwwa, their campaign indicates this with a “Repeat Borrower” tag. Other campaigns run by this borrower are linked in the “Previous Campaigns” section.
What kind of financing does liwwa offer to its borrowers?
liwwa offers merchant cash advance, working capital, factoring, and Sharia-compliant loans to qualifying small businesses.
Is liwwa sharia-compliant?
liwwa provides one Islamic product -- a Murabaha loan -- to qualifying SMEs. In addition, we provide some qualifying borrowers with conventional loan products which are not Sharia-compliant.
liwwa’s asset-financing model was developed in consultation with legal experts in Jordan and modeled after Murabaha transactions at Islamic banks in Jordan. Scholars from the Ministry of Awqaf (وزارة الأوقاف) in Jordan reviewed liwwa’s Murabaha contracts and have verbally confirmed their compliance with Sharia principles. However, liwwa is not licensed as an Islamic lender.
What is liwwa’s grading system?
liwwa’s grading system is an alphabetical grading system that assigns each loan a letter grade ranging from A (lowest risk) to D (highest risk) providing investors with more granular ratings and enabling refined pricing to credit risk.
liwwa’s grading system is based on a survival analysis of historical liwwa loans, supplemented by industry expertise. The score is based on three factors: the borrower’s profile, business profile, and the business’ financial position. Each loan is assigned a credit score ranging from 0 to 10, which is translated into risk level grades from A to D.
To learn more about about liwwa’s grading rating, click here. To learn more about how liwwa’s loans get hosted on the platform, click here.
What are the risks involved with investing on liwwa.com?
Investors on liwwa face the risk that borrowers will default on their loans. liwwa’s ability to transfer payments to the investor is wholly dependent upon the borrower issuing the payment to liwwa. The risks of investing through liwwa, as with any other form of investment, mean that investors may lose all or part of their investment. It is important to us that liwwa’s incentives and risks are aligned with those of the investors, as such, we only receive our service fee when all of the investors in a campaign have received the payments that are due to them. liwwa also maintains a very strict credit policy aimed at ensuring that only the most creditworthy borrowers are featured on the website. In case the borrower is late in making repayments, liwwa also has thorough procedures for debt collection.
How can an investor minimize the investment risk?
We recommend investors to diversify their investments to minimize risk. If an investor places all of their funds in one investment they are at a higher risk of losing a large portion of their money if a single investment goes bad. However, if one spreads out their funds across several diverse investments, if one investment goes bad, the investor loss will be buffered by other investments. This is why we recommend investing across several different campaigns on our website and not placing all of one’s disposable income into liwwa campaigns. To read more about how to diversify, read our blog post.
What happens if a borrower is late on his/her payment or defaults?
liwwa will work with the borrower to get his/her payments back on track and restructure the loan accordingly. More information can be found in our Recovery Policy. Legal action will be initiated if the situation cannot be resolved within a period of 60 days from the payment due date.
liwwa retains attorneys in Jordan who will carry out all legal proceedings on behalf of the Company and its investors to secure the full payment of outstanding principal plus profits. liwwa will also forego its service fees if the payments due were not recovered.
How do I know if a loan is Sharia-compliant?
Sharia-compliant loans are labelled “Sharia Loan” on the liwwa website. Each loan carries a badge.
Is liwwa registered and licensed in Jordan?
Yes, liwwa is a registered Jordanian company with records at the Ministry of Industry and Trade.
How do I file a complaint and how will the complaint be processed?
If you would like to file a complaint, please email us at firstname.lastname@example.org. Our customer service team will assess your complaint, add it to the complaint log and forward it to the relevant team who will then contact you. If your complaint is not satisfactorily resolved, it will be forwarded to the executive team for further investigation. Any other complaints received by liwwa through other customer-dedicated channels will also be similarly processed.