Portfolio performance review (July 2022)

Welcome to the HeavyFinance performance review, where we break down the loans that were given and repaid, as well as summaries the investor returns. To see the report from the previous month click here.

July has been a busy month for farmers. Some grain growers already started the harvesting season and are bringing the produce to the buyers. Dairy farms are continuing to take care of their livestock while vineyard owners are preparing for harvest in September.

Investors followed with financing exciting agricultural projects and over July invested 1.27M EUR into agricultural loans on HeavyFinance. The capital was spread around 57 loans.
In total, 25M EUR were issued to the farmers till the end of July, 2022. To date, 5.9M EUR principal is already repaid to investors together with 1.65M EUR in interest.
Currently, 80% of loans are being paid on time or are already repaid. The overdue principal of more than 90 days is 1.68M EUR – a healthy level of 6.7% of the issued amount.
It is worth mentioning that ratings B+ and C+ were introduced at the beginning of 2022, therefore, there are fewer defaults in this rating category.
The graph below shows the loan originations, principal repayments and interest payments for each quarter. Let’s take Q3 2020 as an example. Over this period, 451 thousand EUR of loans were funded, of which 423 thousand EUR have already been repaid together with 51 thousand EUR of interest. 16 thousand EUR is late for less than 90 days and 12 thousand EUR is currently more than 90 days overdue. (If at least 1 instalment is overdue, we treat the whole principal amount as being late).


During the whole period (since April 2021), 1.87M EUR of loans were issued in Bulgaria and 79% of these are being paid on time or have been repaid already earning investors 107K EUR of interest. Only 50K EUR is overdue for more than 90 days.
One farmer repaid his loan BG0000385 in advance. He borrowed 22 190 EUR for a 3 year term in December of 2021, but fully repaid it in 8 months. Investors earned 1 682.92 EUR resulting in 14.2% internal rate of return for investors.
Regarding late loans, in July there were 5 customers who were more than 30 days late on their payments.
With one customer our recovery team agreed to restructure the loan by changing the payment schedule, extending the loan repayment period and increasing the loan interest for investors by 2%.
Another client who faced insolvency problems covered part of the late payments, but cannot fulfil the obligations in full. Considering that the client plans to receive state benefits at the end of the year, it was agreed to restructure the existing two loan agreements, changing only the payment schedule in exchange for an additional real estate pledge.
Notarized letters were sent to the remaining 3 overdue customers warning them about the contract cancellation if the late payments are not covered.


During the whole period (since May 2021) 1.25M EUR of loans were issued in Latvia. 79% of loans issued are being paid on time or have been repaid already with 60K EUR of interest. There are no loans overdue for more than 90 days.
There are 2 loans overdue more than 30 days. Both farmers promised to pay after the harvest.


During the whole period (since June 2020), 19M EUR of loans were issued in Lithuania, 81% of loans issued are being paid on time or have been repaid already with 1.38M EUR of interest. 1.5M EUR is overdue for more than 90 days.
July was a successful month in terms of negotiations with late borrowers. The majority of the clients are waiting for the end of the harvest to cover overdue instalments.
Two borrowers repaid all of their loans in advance. The internal rate of return (IRR) of each loan is in the table below.
Due to increased fuel, spare parts, fertilisers and services prices 4 loans were restructured and the repayment schedule adjusted to the current farm situation. All restructured loans increased interest rates and/or pledged assets.
All legal procedures are going according to official terms which are not in HeavyFinance’s power to speed up. Our team proactively contacted all clients who are in the legal procedure stage trying to find a solution to the current situation. The main cash flows that will reach investors will be in August – October due to the harvest season and payments for it from the produce buyers.
However, some farmers have already started the harvest season – barley is being harvested, and rapeseed and other crops will be harvested in a few weeks. According to insights shared by the farmers, the current harvest is significantly better than average as no storms and draughts were strong enough to cause significant damage.
During July, 2 loan contracts were terminated and sent to court and 3 writs of execution were provided to bailiffs.


During the whole period (since December 2021) 2M EUR of loans were issued in Poland. 75% of loans issued are being paid on time or have been repaid already with 55K EUR interest. 61K EUR is overdue for more than 90 days.
As the harvesting period is at its’ peak, Polish farmers are harder to reach. Some of them even informed us in advance about future delays in payments due to the busiest time of the year. Payments from them are expected once harvesting is done and the produce is sold.
PL0000437 passed the 30-day late mark with his 5th instalment. Despite the best effort of our operations team, we weren’t able to contact the borrower in July (neither by phone, email, nor SMS). A paper notice has been sent with a reminder of late payment.
PL0000501 made a partial payment of 738 EUR and has been promising to pay the remaining amount as soon as he receives the payment from his customer. As no further payment has been made the loan contract was terminated and legal procedures were started. Documents have been passed over to the recovery company and submitted to the court with additional evidence and correspondence.
PL0000521 entered a restructuring process with the court before contract termination. We’ve received information from the restructuring advisor that the farm is operating and generating income, but needs to be restructured in order to become a healthy business with the ability to fully cover all liabilities. As the business is currently under legal protection, HeavyFinance is waiting for the advisor’s proposal and if all parties (including other lenders) agree, a new payment schedule will be presented and accepted in the court.


During the whole period (Since May 2021) 1.35M EUR of loans were issued in Portugal. 75% of loans issued are being paid on time or have been repaid already with 52K EUR interest. 64K EUR is overdue for more than 90 days.
One farmer repaid his loan PT0000488 in advance. He borrowed 30 000 EUR for a 2-year term in January of 2022 but fully repaid it in 7 months. Investors earned 1 889.69 EUR resulting in a 15.6% internal rate of return for investors.
7 loans are overdue >90 days:

Even though the economic and geopolitical situation is challenging with increased costs for farmers – the majority of agricultural entrepreneurs expect solid revenue from the harvest in Autumn as well as EU support early next year.
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