A conversation with Laimonas Noreika, founder of HeavyFinance, about providing loans to farmers, bringing innovation to the traditionally stagnant agri-loan sector (some numbers: over €70M loaned to farmers and over 13,000 individual investors have invested through them).
The profitability of regenerative agriculture isn’t just a theory—it’s backed by hard data from hundreds of thousands of hectares across Eastern Europe. According to Laimonas, the financial case for regenerative farming methods is compelling, showing roughly 20% higher profits compared to conventional approaches, even without factoring in potential carbon credit revenue.
Traditional banking institutions have created a €60 billion annual financing gap for small and medium-sized European farms, which means we need institutional investors. Some, like the European Investment Fund, have invested through HeavyFinance. And why aren’t banks stepping in? Because small farmers don’t fit their criteria well. So, we need new fintech solutions and scale.
Despite agriculture presenting lower default risks than many other industries, banks avoid these loans because of regulatory requirements that penalize them when farmers experience seasonal payment delays. This financing gap has slowed the transition to more sustainable and profitable farming methods, particularly in Eastern Europe’s breadbasket regions where soil organic carbon levels have plummeted from approximately 150 tons per hectare historically to just 30 tons today.
HeavyFinance bridges this gap with an innovative approach: providing interest-free loans to farmers transitioning to regenerative practices, particularly for purchasing no-till seeders and implementing cover cropping systems. Instead of charging interest, they take a percentage of future carbon credits generated by improved farming practices. This creates a powerful incentive system where farmers access needed capital without interest payments while simultaneously improving soil health, reducing input costs, and increasing crop resilience.
SMALL FARMERS IN EUROPE ARE UNDERCAPITALIZED
Small farmers struggle to access loans due to banks’ rigid risk models, high administrative costs and regulatory constraints, which make small loans unprofitable.
‘’If you’re a traditional financial institution, a bank, to provide a loan smaller than €50,000, you make direct negative profitability. Instead of making money, you lose money each time. Farmers don’t need a new €200,000 tractor; they need a €45,000 used one, but banks can’t serve them profitably. […] Farmers are scored like cafés or pharmacies, but they lack monthly cash flow predictability. For banks, even a 90-day delay ruins their statistics.” Laimonas Noreika
HOW FLEXIBLE LOANS ENABLE FARMERS TO TRANSITION TO REGENERATIVE AGRICULTURE
HeavyFinance offers zero-interest loans tied to carbon credits, allowing farmers to invest in regenerative tools (e.g., no-till seeders) while absorbing short-term risks.
“If the farmer wants to switch from conventional to regen farming, we provide funding with no interest. The farmer buys a no-till seeder, changes practices, and our agronomists step in. Instead of charging interest, we take 35% of future carbon credits. The farmer gets free capital, upgrades their farm, and gains a long-term revenue stream from carbon credits after repaying the loan.” Laimonas Noreika
REGENERATIVE AGRICULTURE IS MORE PROFITABLE, AS DATA SHOWS
Data from soil sampling and financial analysis demonstrates that regenerative practices lower costs (e.g., reduced fertilizer use) and stabilize yields.
“Farmers damage soil with plows and over-fertilize, paying to ruin their own margins. When they switch to no-till, stop losing organic carbon, and cut fertilizer use, margins improve. We’ve proven it: regen ag increases profitability by 20% even without carbon credits. If carbon markets mature, that jumps to 40%. The data is clear—healthier soil means healthier profits.” Laimonas Noreika
BIG BANKS AVOID FINANCING SMALL FARMERS
Banks prioritize short-term cash flow predictability and face regulatory penalties for delayed repayments, making small farm loans unattractive.
“Banks need monthly cash flow predictability. Farmers operate on annual cycles—if the sun isn’t there, they lose a crop and can’t pay. A 90-day delay means nothing to them, but for banks, it’s a red flag. Even if farmers repay eventually, the regulatory penalties (like capital adequacy ratios) make small loans unprofitable. Banks prefer large, predictable clients.” Laimonas Noreika
OTHER POINTS DISCUSSED
Koen and Laimonas also talked about:
- Carbon credit market potential
- Farmers’ respect and mental health
- Soil sampling and data insights
LINKS:
- HeavyFinance
- ‘A pivotal moment’ for regenerative agriculture as Agreena secures Verra registration for soil carbon project
LINKED INTERVIEWS:
- Johannes Scheibe on using carbon credits to transition from understocked and overgrazed to zero input grazing
- Bert Glover on investing over $600M into regenerative farms in the US and Australia and selling soil carbon credits to Microsoft
- Cameron Frayling on what is needed to unlock biodiversity credits
- Christian Shearer o selling 100,000 soil carbon credits to Microsoft on the blockchain
- Jim Mann – Biochar and enhanced rock weathering to remove 1B ton carbon annually and holistically
- Robin Saluoks and Kristjan Luha on how to start paying 1500 grain farmers across 1M hectares for soil carbon
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The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.