Peer to Peer or P2P models in Fintech were one of the earliest to take hold post Financial Crisis. Some companies flourished and some got stuck.
The asset base of Agriculture lends itself quite well to a collateralised P2P model and there are some excellent examples in the sector to consider:
Acre Trader in the US have created an entire category around farmland investment as an asset class using a P2P model
Heavy Finance operate in Europe and offer a P2P platform for agri equipment. 🚜
Lande also operate in Europe and have used farmland to secure finance.
Campo Capital in Brazil facilitate P2P sustainability linked finance for Coffee farmers. ☕️
The P2P model gives companies the advantage of MANY investor conversations, possibly thousands for insight.
Campo Capital used these insights to their advantage and structured P2P 'Greeniums' for sustainably sourced coffee in Brazil. A greenium gives a borrower a discount in financing costs for sustainable practices.
Caixeta advised that 60% of the investors on their P2P platform were interested in sustainability and because the banking system in Brazil offered such low returns, they could price 'Greeniums' into their model that worked for investors
and investees.
One observed issue with sustainability linked finance is finding investors who are willing take on the risk for the lower return. Could P2P be part of the solution?