Ways to support farmers through P2P investment
Farmers are increasing looking to alternative finance to meet the demands of their businesses in a – both literally and figuratively – difficult climate.
They represent an appealing prospect for investors who want to contribute to a green agenda, as investment in modern farming methods can help to tackle climate change.
If agriculture is an area that interests you as an investor, there are several alternative credit platforms that enable investors to support farmers via peer-to-peer (P2P) lending.
Read more: Vinted co-founder invests €1m in green loans via HeavyFinance
Here are three leading platforms that support agricultural projects and what they offer:
Lande Finance
Latvian peer-to-peer lending platform Lande enables investment in agriculture and farming starting from a minimum of €50.
According to P2P Market Data, the funding volume of Lande in September 2023 was €0.16m, a decrease of 77 per cent compared to the same month last year.
Lande’s total funding volume is €14.35m since launching in January 2021. During the last 12 months the platform has funded €9.03m, which is an increase of 106.3 per cent compared to having funded €4.38m during the previous 12 months.
The investments are denominated in Euros and are available to retails investors. Returns are projected to be 9 per cent or more and the platform offers an auto-invest feature and the ability to buy and sell loans on a secondary market.
Lande was the first P2P lending company in either the eurozone or continental Europe to earn a 4th Way plus rating.
The company was founded by Ņikita Gončars, who remains chief executive.
“When we analysed the market, we saw that there are many real estate platforms and payday lenders but we thought that P2P investors may like a new product and asset class,” Goncars told Alternative Credit Investor (ACI) last year.
“It’s a different part of the economy. Grain and agriculture are a basic human need. While property deals may slow down during the crisis, you can’t delay food intake.”
HeavyFinance
HeavyFinance is a Lithuanian peer-to-peer lending platform, focused on investment in agriculture and farming.
Investments can start from as little as €100, and returns are projected to be 9 per cent and more.
The investments are denominated in Euros and are available to retails investors.
According to P2P Market Data, HeavyFinance has funded more than €30m worth of loans to date, with an historical nominal interest rate of around 12.19 per cent. Loan amounts range between €7,000 and €300,000, and maturities do not exceed four years.
HeavyFinance does not offer an auto-invest feature, but investors can buy and sell investments on a secondary market.
Darius Verseckas co-founded HeavyFinance and is the firm’s chief marketing officer.
Speaking to ACI earlier this year, he said: “Anyone with an account in the EU can invest. The minimum investment is just €100. We do have some British investors but they aren’t in our top 10. The platform has roughly 9,000 investors, with most from Lithuania, France and Germany.”
He said the platform’s green loans will become its biggest product in the long-term. HeavyFinance closed a €3m fundraising round in March, which was aimed at helping to expand its green loans.
The business expects its green loan book to reach more than €5m by end of the year.
Folk2Folk
Folk2Folk is a UK-based peer-to-peer lending platform, for investing in small business debt starting at £20,000.
The investments are denominated in pound sterling and are available for retails investors.
Folk2Folk was founded in Cornwall in 2013 while the UK was still reeling from the global financial crisis, and banks were withdrawing from rural areas.
The company was founded to help solve this local problem but has since grown to expand nationally to help rural businesses across the UK.
The platform’s interest rates start from 8.75 per cent, but according to managing director Roy Warren some of its loans are currently paying 10 per cent or more.
Folk2Folk enables investors to buy and sell loans on a secondary market.
Read more: Farmers are increasingly looking to alternative finance
