European peer-to-peer agrilending platform HeavyFinance is considering a UK launch.
Platform representatives are currently in talks with the London office of a tier one investment bank for potential senior financing, and they will be conducting more talks with UK-based investors to assess the best course forward.
“We are open to begin originating in the UK and Ireland, but have not expanded to those markets yet,” said John Safaev, head of capital markets at HeavyFinance.
“As of now, we are lending in Portugal, Poland, Lithuania, Latvia, and Bulgaria. We will be expanding as we gain access to more funding, especially cheaper institutional funding.”
HeavyFinance has originated more than €20m (£17m) in agriculture loans to date. Loans are funded by a mix of retail and institutional investors, with an average return of 11.89 per cent.
The platform will soon be launching a new product which will offer zero percent interest loans to European farmers. Under the terms of the deal, HeavyFinance will claim the farmer’s carbon credits and these can then be traded in a tokenized format with other farmers or agritechs or converted into cash as the value of the carbon credits increases over time.
“In Europe, €230bn of agriculture-focused loans are originated every year,” added Safaev. “Yet, there is a €30bn funding gap as farmers are not able to find smaller granular loans and leasing solutions since the larger banks will not provide loans of below €50,000 to farmers.”
Safaev pointed out that the need for more agrilending has been highlighted by the Russian invasion of Ukraine, which has disrupted key supply chains across Europe. He believes that the EU will soon take action to support more alternative platforms such as HeavyFinance, in an effort to “fill the funding gap and bring Europe’s food supply chain closer to home.”