Agricultural loans backed solely by personal accountability are proving to be more reliable than many investors initially expect. When farmers take their personal reputation and future borrowing capacity on loan performance, the psychological commitment runs deeper than any physical asset backing.
Agricultural loans capped at €25,000 consistently demonstrate to generate over 10% annual interest for investors. This isn’t coincidental; it reflects the optimal balance between meaningful capital injection and manageable repayment obligations.
Smaller loan amounts align perfectly with typical agricultural cash flow cycles. Farmers can more easily integrate these payments into their seasonal revenue patterns without overextending their operations. The result is a lower default rate and more predictable returns for investors.
InSoil Finance currently facilitates between €1.6 and €3.3 million in uncollateralized agricultural loans annually. This volume represents hundreds of individual farmers accessing growth capital while providing investors with meaningful diversification across multiple borrowers, countries, and agricultural sub-sectors. This scale allows investors to spread risk across diverse agricultural operations.
InSoil’s Track Record: Strong Performance and Repayment
Since launching our uncollateralized loas, InSoil has helped more than a thousand farms and agri-businesses bridge financing gaps. Average interest rate across uncollateralized loans is 13.58%. Our data shows that loans issued in 2021 and 2022 have already repaid more than the initial investment, demonstrating both the resilience of the agricultural sector and the effectiveness of our risk assessment model.
This means that investors and stakeholders have seen full principal recovery plus additional returns within just a few years.
2024 and 2025 portfolio is still in early stage of maturity, but with time it is expected to outperform the earlier years.
Why Agricultural Debt Deserves Your Attention
Stable Demand: Food production remains recession-resistant. Regardless of economic conditions, agricultural operations continue generating revenue and requiring capital for improvements.
Essential Industry: Agriculture underpins food security, making it a sector with inherent stability and government support during challenging times.
Underserved Market: Many traditional lenders overlook smaller agricultural operations, creating opportunities for alternative financing providers to build strong relationships with creditworthy borrowers.
As traditional banking increasingly focuses on larger, more standardized loans, opportunities in smaller agricultural debt continue expanding. The combination of strong performance, essential industry focus, and underserved market dynamics creates compelling conditions for investors.
