HeavyFinance takes one step further to provide more access to finance for small and medium-sized farms and partners up with the Swiss fund I2 group.
As the demand for agricultural financing increases, HeavyFinance experienced a need to broaden the investor base and include institutional investors. Until now HeavyFinance investors collected €12 million euros for agricultural development in Lithuania, Bulgaria, Portugal and Latvia resulting in €1 – €1,5 million euros each month.
“The partnership with i2 group will allow HeavyFinance to grow at a much faster rate, which also facilitates a broadening of offerings to both our investors and borrowers. The increase in available capital also allows us to finance larger loans in more jurisdictions”, explains Laimonas Noreika, CEO and founder of HeavyFinance.
“We have integrated HeavyFinance’s loan portfolio into our software environment, which allows for effortless integration into any portfolio of our current and future customers. We will be able to provide our customers with the high-quality, standardized payment and loan data they expect, significantly increasing liquidity in this important part of the market”, said Gregor Stadelmann, CEO and co-founder of i2 group.
Financial gap in European farms
The partnership with i2 group will help to close the financial gap in the European Union\’s agriculture sector, which is caused by insufficient financing solutions for farmers. HeavyFinance currently originates loans in Bulgaria, Latvia, Lithuania, and Portugal, the combined market gap for agricultural loans is estimated to be between €1.4 and €3.3 billion. Most of the gap, according to the Fi-Compass report by the European Commission, is caused by the unmet funding needs of smaller and medium farms.
Investor willingness to invest in agriculture
“We identify a robust investor appetite for high-yield investment products. The majority of our loans are secured by heavy machinery or land, making the investments even more secure. Investors understand that agriculture is a promising sector for investments since the worldwide demand for food is constantly increasing, and modernized technologies are one solution to meet this demand” says Laimonas Noreika.
The majority of the HeavyFinance loans are dedicated to the modernization of farms’ technical fleets, as well as the expansion of agricultural land plots or the improvement of farms’ daily operations. The average interest rate on the platform currently is over 11,6% which is not expected to be affected by the partnership with Swiss institutional investors due to the rapid growth of the HeavyFinance.