Running a farm of any size is an expensive endeavour. It requires a lot of upfront costs to keep the business going, all with the hope and expectation that future sales will cover those high costs.
With reasonable agricultural loans, farmers can more readily upgrade their machinery and add other new cutting-edge technology – such as smart sensors – to drastically increase the efficiency of their farms.
In 2020, three entrepreneurs – Laimonas Noreika, Andrius Liukaitis and Darius Verseckas – found a way to fill the financing gap for small and medium-sized farms. They built a marketplace HeavyFinance, where the global investor community meets European farmers.
The start-up now has a community of over 5.000 investors and has already helped close to a thousand farmers, with an average loan size of almost 31.000 EUR. That corresponds to 28 million EUR issued in loans for small and medium farms in two years.
“Smallholder farmers are a key to tackling the food security issues the world is facing, but they’re increasingly facing barriers to profitability,” says Laimonas Noreika CEO and co-founder of HeavyFinance.
Farmer-oriented financing solutions also help small and medium-sized agricultural businesses to catch up with the technological progress happening in the agricultural sector. One of the prominent technologies in this sector is no-till farming which has been known for a while, however, just now has a chance to reach mass adaption.
“The idea of modern no-till farming started in the 1940s and yet many farmers still haven’t shifted to this climate-friendly way of soil management,” says Laimonas.
No-till farming is part of so-called carbon farming – an approach to optimizing carbon capture on working landscapes by implementing practices that are known to improve the rate at which CO2 is removed from the atmosphere and stored in plants and/or soil.
After implementing no-till soil management practices, farmers sequester and store about 2 tons of CO2 per hectare per year.
HeavyFinance is on a mission to help farmers switch to this farming practice and, consequently, generate carbon credits. The first Green Loan was already issued on the platform in October 2022.
“We aim to remove and store 500.000 t CO2 in the agricultural lands by the end of 2037. It is equal to capturing emissions of 1,2 billion kilometres driven by an average gasoline-powered passenger vehicle,” explains Laimonas.
Seeing the positive environmental change the company is driving, TaiwanBusiness – EBRD Technical Cooperation Fund joined HeavyFinance. The fund has invested in the company during one of the venture capital equity rounds.
European Bank for Reconstruction and Development also wrote a story about cooperation with HeavyFinance. You can find the piece of writing here.