The Lendsecured brand has created the first crowdfunding platform to help European farmers obtain funding using grain as collateral.
Through the platform, it is planned to attract and issue financing, thus reducing the demand for financial resources in the agricultural sector, improving the opportunities for growth and access to financing in rural areas of Europe.
European farmers from countries such as Hungary, Latvia, Estonia, Lithuania, Greece, Romania, Bulgaria, Croatia and Spain are struggling before harvest to secure the necessary capital to buy machinery and equipment, holding back national and regional growth.
The essence of the idea is that at the beginning of each season, farmers need working capital, for example, to buy fertilizer, hire labor, repair equipment. Working capital is issued against the pledge of the future harvest, ie the farmer receives financing before the season, but returns it when the season is over and he has transferred the harvest to the grain collector.
The platform allows investors to diversify their portfolios, supporting European rural development, including organic, not just traditional farmers.
“By improving access to finance for the EU’s rural areas, we are driving innovation and creating much better working conditions, while providing investors with a diversified portfolio, which is a great alternative to short-term loans. Investing in projects that add value to the EU economy, combines responsible investment and mutual benefit, which we believe is the future of investment and is in line with the UN Sustainable Development Goals, ”emphasizes Nikita Gonchar, co-founder of LendSecured.
The LendSecured team has more than 10 years of experience in providing financial services. Investors’ money is not held in a LendSecured account, but is segregated from the platform’s funds in BNP Paribas bank through the well-known European payment institution LemonWay. This is one of the requirements of the crowd financing service provider’s (ECSP-eng.) License – to keep investors’ money separate from the platform’s funds.
The regulation for obtaining a license in the EU was adopted in November 2020, and Member States have been given one year to adapt, so in November of this year LendSecured plans to be the first platform registered in Latvia and obtained a collective financing license. In addition, the platform complies with the principles of the fight against money laundering (AML) and accepts payments only from the EU and European Economic Area (SEPA) countries, according to its creators.
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