InSoil Finance Review 2025: 95% Red Flags, 5% Green Lights

Editor’s Note: This analysis is based on audited financial statements for 2024, official platform documents (price list & user terms), InSoil’s May portfolio review, the EIF/InvestEU press release on a portfolio guarantee, and the Key Carbon partnership announcement, plus written replies from the company. Nothing here is investment advice.

Update (2025-08-21): An earlier version of the article had an error regarding the payment waterfall in case of defaults. Thanks to feedback from Andreas (who runs p2p-anlage.de) this has been corrected and illustrated with a screenshot in the 'Profiting from Failure: InSoil’s Servicer Model' section.

Executive Summary

InSoil offers traditional farm loans and zero-interest Green Loans tied to carbon-credit sales. Despite advertised ~13% returns, our analysis shows the live portfolio delivers ~4.5% (InSoil disputes our methodology; see Portfolio Performance section for details). Only A+ loans and select Lithuanian state-guaranteed projects offer profitable opportunities. These attractive loans represent only about 5% of the total, requiring investors to keep funds elsewhere liquid and only move them over once those loans appear. 

Several key issues contribute to the platform's high risk:

• Unfavorable Green Loans: Following a severe liquidity crisis in late 2024, InSoil allowed Key Carbon (an outside investor) to have first pick of its zero-interest Green Loans in exchange for a critical €3.7 million bailout. This arrangement contractually prioritizes institutional capital, leaving retail investors with only secondary access (‘the undesirable leftovers’), effectively rendering this loan category a "no-go" due to the adverse selection bias.
• Incentive to Delay Recoveries: Nearly a quarter of InSoil's 2024 revenue came from late-loan fees. Acting as its own servicer, the platform is fundamentally paid for borrower failure, not recovery success, creating a direct incentive to profit from the same prolonged delinquency that puts investor capital at risk.
• High costs for borrowers: InSoil charges ~8% to borrowers as loan origination fees. While not exceptional (Twino charges roughly the same), that’s steep and has two consequences: Borrowers who are more credit worthy go elsewhere and that’s now 8% not available for paybacks.
• Problematic Guarantees: While some loans have government guarantees, the primary EIF/InvestEU guarantee creates a two-tiered system, shielding institutional partners by design and leaving retail investors with unguaranteed, higher-risk loans. A separate guarantee applies to some, but not all, Lithuanian retail loans, which is why they remain a key area of opportunity.

In summary, the only viable strategy is to exclusively target the scarce A+ and state-guaranteed Lithuanian loans. Their low default rates are the key, as they largely insulate investors from the platform's most dangerous flaws: its servicer compensation model and the untested cross-border recovery process. The remaining portfolio, particularly the structurally disadvantaged Green Loans, does not offer a favorable risk-return profile.

Key Highlights

Pros (The Scarce Opportunities)

• A+ Rated Loans: The highest-quality segment, with an estimated APY of ~10.5% and minimal defaults. However, at only ~5% of platform volume, this scarcity comes with significant cash drag risk.
• Lithuanian State Guarantee: Select retail loans are backed by a Lithuanian government guarantee (ACGF) covering up to 80% of principal - a significant risk mitigator. However, at the time of publication we did not see any Lithuanian loans that showed an indicator of being backed by this guarantee.
• Latvian Market Performance: Demonstrates consistently lower delinquency rates compared to other platform regions.

Cons (The Dominant Risks)

• Compromised Green Loan Structure: Following a 2024 liquidity crisis, Key Carbon received priority investment rights to these zero-interest loans in exchange for a €3.7m bailout. As of August 2025, no public evidence exists of carbon-credit returns reaching retail investors.
• High-Risk Geographic Exposure: Poland and Portugal exhibit elevated delinquency rates. We assume this to be a direct result of the institutional-only EIF guarantee siphoning off safer loans (this is our inference based on the structure of the EIF agreements; loan-level inclusion lists are not public), leaving retail with the unguaranteed leftovers. The only retail protection is the ACGF guarantee, which covers up to 80% on select (if any) Lithuanian loans only.
• Poor Asset Quality: The C+ loan category shows severe delinquency with negative estimated APY. Overall portfolio defaults reached ~18% by amount as of mid-2025.
• Deteriorating Company Financials: €1.64m net loss on €1.81m revenue in 2024, with concerning liquidity position before emergency funding. This financial strain directly led to the crucial €3.7 million bailout from Key Carbon in late 2024, a lifeline that came with significant strategic concessions, specifically granting them preferential access to Green Loans.

How InSoil Works

Platform Mechanics: Loan Structures and Key Risks

InSoil offers two distinct loan products, each with its own mechanics and risk profile.

1. Traditional Loans: This is the platform's straightforward offering. Loans are secured by physical assets like machinery or land, with loan-to-value (LTV) caps typically set at 70% for machinery and up to 90% for land. Investors receive a fixed interest rate, while InSoil earns fees from the borrower. While simple in structure, the most attractive of these loans (A+ rated) represent only ~5% of platform volume.

2. Green Loans: A Red Flag for Investors: Theoretically, Green Loans offer investors an innovative return model. These zero-interest loans fund regenerative farming practices, with investors intended to profit from future soil-carbon credit sales. 

The loan itself doesn’t generate any interest. Instead, investors get the rights to future carbon credits that an investment may end up producing. These carbon credits can be sold on the open market. See this site for a more in-depth explanation of the concept.

Per platform documents, investors receive 60% of sale proceeds while the loan is active, and 40% for one year after repayment.

However, the model suffers from structural flaws and concerning opacity for retail investors:

• Compromised Access: The 2024 bailout, necessitated by InSoil's severe liquidity challenges, fundamentally reshaped access to Green Loans. As a condition for their €3.7 million investment, Key Carbon secured a legally binding contractual right of first investment. This means retail investors may only access these loans after institutional capital has declined them, effectively siphoning off the most attractive opportunities and leaving retail with residual, less desirable assets, if any.
• No Evidence of Returns: As of August 2025, InSoil has provided no public, loan-level evidence of verified carbon credits being sold or cash distributed to retail investors.
• Unclear Cost Structure: The 60/40 split is calculated after deducting MRV (monitoring, reporting, and verification),registry, and brokerage costs from gross proceeds. Hard to tell how much the 60% will actually be of gross proceeds.
• Significant Execution Risk: Returns depend entirely on multi-year verification timelines, third-party registry acceptance, and volatile carbon credit pricing. No backup servicer arrangements are disclosed for this complex process.

General Operational Constraint: Illiquidity Both loan types suffer from illiquidity. Recovery timelines for defaulted loans can extend years, and while a secondary market exists, sellers pay a 1% fee.

Returns & Cost Structure

Borrower origination/servicing fees. When looking at how much InSoil charges its borrowers for the privilege of getting money from them, they only provided a rather hand-wavy fee range 1 to 8%. We asked InSoil to be a little more precise. They said 'confidential'. We said 'calculator'. Audit time:

InSoil’s audited 2024 financial statements list “financial intermediation income” (€1.27m) plus “administrative fee for loans” (€0.11m). If you divide that by new disbursements in 2024 (~€16.81m) you’re getting ~7.6 to 8.2%, depending whether you count the administrative fees or not. 

Long (and unsurprising) story short: 1 to 8% means 8%.

Late‑loan income share. “Income from administering late loans” was ~23% of 2024 revenue. This is audited and material.

Secondary‑market fee. Seller pays 1% of sale price on exit.

Profiting from Failure: InSoil’s Servicer Model

A loan servicer is responsible for collecting overdue payments. While this function is often outsourced, InSoil acts as its own servicer. The issue lies in how it gets paid: the platform’s fee structure creates a severe conflict of interest that misaligns its goals with those of investors.

A typical servicer is paid for success, earning a percentage of recovered funds (see our Indemo review for an example of that setup). InSoil, however, is paid for failure. It charges a continuous, daily fee on the entire outstanding principal for as long as a loan remains delinquent, creating a direct financial incentive to profit from the very delays that put investor capital at risk.

The Payment Waterfall

The payment waterfall lists out in which order payments are made. This doesn’t matter much if the borrower makes all payments (or none), but it is the single most important thing in case of a default with limited payments. It answers the questions of who gets paid first and who is most likely to go empty-handed. 

The crucial part of InSoil's waterfall operates as follows:

1. Penalty Charged: A late borrower is charged a penalty of 0.2% per day on the overdue principal.
2. Penalty Split: This fee is divided equally: 0.1% goes to InSoil as an "administration fee," and 0.1% goes to the investor as penalty interest.
3. Fees Paid First: Crucially, any recovered money is first used to pay these accumulated penalty fees. Only after all penalties and contractual interest are settled is the remainder applied to repaying the investor's principal.

The last point probably requires some additional explanation. 

A Repayment Example

Courtesy of Andreas from p2p-anlage.de, we have a great example in the following screenshot. In this case the borrower made the full payment, but they were late. This allows us to see who (and what) got paid first:

What do we see here?

A borrower had an outstanding loan of EUR 198.99 that became due on September 8th, 2024. The borrower did not make any payment until 9 days later on September 17th, 2024. At that point, 9 days of late penalties (0.2% on outstanding principal and interest) had accumulated. When the first payment was made on that day, we see that a late fee of EUR 3.68 (0.2% * (198.99 + 5.82)) was charged. Half of that the investor kept, half of it was deducted and went to InSoil. After that the remaining amount was applied to the outstanding interest (which went from EUR 5.82 to zero) and then the principal (which went from EUR 198.99 to EUR 0.81). The full principal was only paid off after the entire outstanding amount was paid off.

What does this tell us?

Penalties get paid first. That's InSoil's share as well as the investor's share at 0.1% each. However, it remains unclear if the investor's penalty interest and the admin fee have equal priority. Given how they present it here though, there is a strong indication that investor and InSoil's share in the penalty fee is of equal rank or that the investor’s rank is even higher. 

To confirm this, we would need an example where the repayment doesn't cover the full penalty interest. If the payment is split 50/50 in that scenario, it would confirm they are of equal rank (feel free to reach out if you have experienced this). 

If the investor’s penalty would be ranked higher, it’s theoretically possible that only the investor gets repaid and InSoil gets absolutely nothing for their efforts. I find it hard to imagine that they would set it up that way as it would give them zero incentive to do any recoveries once the investor’s claim exceeds anything the borrower could cough up. 

Let’s assume the rank is equal and proceeds from the penalty get split 50/50 - ahead of any other repayments.

Why would this be bad?

Consider a hypothetical example: A loan of €100 is outstanding. A year past due, a single (and last) €50 repayment is made. The 0.2% for 365 days would amount to €73 in penalty interest total (excluding standard interest for simplicity). Since the €50 payment doesn't cover the full penalty, it would be split between the equal-ranking claims. InSoil would receive €25, and the investor would receive €25.

In this scenario, InSoil collects a €25 late fee. If they already earned, for instance, an €8 issuance fee, their total return becomes €33 (so this just increased their revenue by 312.5%). The investor, meanwhile, has only recovered €25 and still faces a loss of €75 on their principal.

This structure creates a perverse incentive for InSoil to delay recovery. The longer a loan is overdue, the higher the accrued penalty interest, which in turn increases their potential fee ... a fee that comes out of the investor's principle.

The Two-Tiered Guarantee System: How Retail Gets the Leftovers

InSoil’s has a number of institutional partnerships that they don’t prominently mentioned in communication with retail investors. There is a good reason for that: These partnerships are not a rising tide that lifts all boats; they are a filtering mechanism that systematically channels higher-quality assets away from retail investors, leaving them with the unguaranteed leftovers. The evidence for this two-tiered system is found in the structure of their agreements with the European Investment Fund (EIF).

• The Institutional Safety Net (EIF Arrangements): InSoil has two core EIF-backed structures: a portfolio guarantee and a private credit fund. Both are designed to de-risk lending for institutional capital. To be included in these protected pools, loans must meet strict eligibility criteria set by the EIF. This creates a powerful incentive for InSoil to siphon off its best, most compliant loans from markets like Poland and Lithuania into these guaranteed vehicles.
• The Retail Exception (Lithuanian ACGF): The only guarantee relevant to retail investors is the Lithuanian ACGF state guarantee. It is a significant risk mitigator, covering up to 80% of principal, but it only applies to a select subset of loans in one country. There however it’s an amazing guarantee: If a debtor doesn’t repay, the government of Lithuania will make you whole for up to 80% of the loan amount (they don’t reimburse you for the remaining 20% or any lost interest). The problem: While trying to find out what that badge actually looks like, I wasn’t able to locate a single loan that showed it. Maybe InSoil can shed some light on this - I recommend reaching out to them directly before investing in any Lithuania loans.

The Implication is Clear: The high delinquency rates seen in the Polish portfolio are not a bug; they are a feature of this model. Retail investors are systematically exposed to adverse selection, funding the loans that were not good enough to qualify for the institutional safety net.

Portfolio Performance: A Reality Check

Based on our analysis of InSoil's live loan book as of June 23, 2025:

• Platform-wide Est. APY: ~4.52%
• Total Default Rate (by amount): 18.02%
• Total Issued: €82.3M

Our central finding of a ~4.5% portfolio-wide APY is the metric InSoil disputes most heavily. The disagreement stems from a fundamental difference in methodology.

• The Platform's View (A Lagging Indicator): InSoil's official statistic relies on a retrospective methodology, only accounting for loans that are either fully repaid or have been formally written off after all recovery attempts have failed. Crucially, this approach ignores the vast pool of currently delinquent assets stuck in recovery. A methodology that doesn't count a problem loan until it's officially buried is, in our view, designed to present a rosier picture than reality warrants.
• Our View (A Real-Time Snapshot): In contrast, our ~4.5% APY is a forward-looking, point-in-time estimate. While this calculation doesn't yet factor in future, uncertain recoveries, it provides a more intellectually honest and realistic snapshot of the portfolio’s current health.

While future recoveries will undoubtedly provide some uplift, the idea that they could bridge the chasm between our current ~4.5% APY and the platform’s advertised ~13% is, frankly, not credible.

Ultimately, the blended portfolio average is less revealing than the grade-by-grade data, which tells a stark story of divergence. While the A+ category performs as advertised, the lower grades show a catastrophic failure in underwriting.

Performance by Grade:

• A+: Est. APY ~10.46% | Default Rate ~1.6% | Allocation ~5.6%
• A: Est. APY ~6.33% | Default Rate ~15.5%
• B+: Est. APY ~2.63% | Default Rate ~11.3%
• B: Est. APY ~4.91% | Default Rate ~22.4%
• C+: Est. APY Negative | Default Rate ~35.7% | A dumpster fire.
• C: Est. APY ~8.76% | Default Rate ~59.4% | (Idiosyncratic mix)

For those interested, the complete calculation and methodology for our APY estimates is available for review in our P2P investor Telegram group.

Delinquency by Geography (>90 DPD, May 2025): Portugal ~35%, Bulgaria ~26%, Poland ~24%, Lithuania ~7%, Latvia ~4%.

Key Trends in the first half of 2025: Volume +28.5%; overall default rate improved modestly; A+ strengthened; B cohort deteriorated; absolute defaults rose with growth.

Recovery Cadence (Timing Risk): InSoil cites €4.29m historical recoveries, but the current pace is slow. ~€65k recovered in May 2025 against ~€7.68m in current defaults represents a recovery rate of less than 1% per month. This highlights a severe liquidity risk for investors, even if long-run recoveries eventually improve.

Ownership & Management

Control: Founder-led with VC backing from Practica Venture Capital III and Wise Guys Seed Fund I. The VC presence explains the aggressive growth strategy despite 2024's liquidity crisis.

Leadership Team:

• Laimonas Noreika (CEO): Founded FinBee (2015 - 2020), Lithuania's regulated P2P platform. Ironically, his earlier writings warned against "risk-free" illusions in P2P lending.
• Andrius Liukaitis (CFO): Ex-CFO of NEO Finance, experienced in regulated reporting and stress-testing.
• Darius Verseckas (CMO): Fintech marketing veteran.

The Takeaway: This isn't amateur hour - these are experienced operators. This also means that their two-tier guarantees and late-fee waterfall are not unintentional design accidents, but deliberate choices. 

Tl;dr: We’re not angry. Just disappointed.

Regulatory & Legal Structure: A License to Operate, Not a Guarantee of Safety

InSoil operates under the European Crowdfunding Service Provider (ECSP) license, a harmonized framework for crowdfunding across the EU. It’s crucial for investors, particularly those familiar with MiFID II-regulated platforms like Latvia's Indemo or Twino, to understand what this license is, and what it is not.

The core difference lies in the nature of the asset being sold.

• MiFID II platforms (like Indemo): Typically package loan claims into formal financial instruments, such as notes or bonds. You are buying a security, and the platform is acting as an investment firm.
• ECSP platforms (like InSoil): Facilitate direct loan claims. You are not buying a security; you are buying a contractual right to repayments.

This distinction has profound consequences for investor protection, most critically the absence of a robust safety net.

The Missing Safety Net: No Investor Compensation Scheme

This is the single most important difference. MiFID II-regulated firms in Latvia are part of a state-backed Investor Compensation Scheme (ICS), which protects an investor's assets in the event of platform fraud or insolvency. Crucially, this scheme's coverage is comprehensive. It protects both the uninvested cash in a client's account and the financial instruments, such as securities, held by the firm on the client's behalf, up to a limit of €20,000.

To be clear: this does not cover losses from a loan defaulting (market risk). It covers losses if the platform itself collapses and, due to fraud or gross mismanagement, cannot return the assets it is supposed to be safeguarding for you.

The ECSP framework, in stark contrast, has no such requirement. If InSoil fails and a shortfall occurs in either client cash or the loan claims themselves, investors are left with no state-backed compensation fund to make them whole.

Untested in Practice

This lack of a final safety net magnifies the risks of the platform's untested legal structure:

• Authorisation: ECSP licence; supervised by the Bank of Lithuania.
• Client money: Segregated client accounts for uninvested cash; invested funds are collateral-backed loan claims.
• Backup administrator: UAB Finansų Avilys, as per the business-continuity plan.

Lithuania’s precedent gap: No full P2P insolvency wind-down on record. In a stress event, investors would become the first test case for several critical unknowns:

• Transfer speed & cost: How long capital is frozen during a handover, and who pays for the transition.
• Creditor seniority: Whether platform-level creditors can delay or dilute loan-level recoveries: Meaning a farmer might pay back a loan in full, but instead of retail investors, this money goes to someone else who loaned InSoil money for other purposes.
• Cross-border enforcement: The practical priority of Lithuanian contracts with bailiffs and registries in Poland, Portugal, or Bulgaria.

Green Loans perimeter: The ECSP license covers loan intermediation; the carbon-credit engine (origination, verification, sale, and royalty) sits alongside it. Until a full legal waterfall is published, investor seniority in that revenue stream remains opaque, adding a significant layer of unquantifiable risk.

Deconstructing Recoveries: A Reality Check

Let's be clear: nobody knows exactly what future recovery rates will be. What we can do is analyze the observable data and the structural factors that will drive outcomes. This is particularly important as InSoil's primary defense against our low ~4.5% APY calculation is that it fails to account for future recoveries, which they imply will materially improve the outcome. The observable data, however, does not support this optimistic view.

The Current Reality: The platform's recovery velocity against its growing pool of bad debt is critically slow. For clarity, all figures below refer to cash recovered and paid to investors, not accounting promises.

We analyzed the company's own reports to establish a clear trend:

• The Problem Pool (>90 days overdue): This pool of severely delinquent loans grew from €7.7M in May 2025 to €9.9M by July 2025.
• The Recovery Cadence: The cash recovered from the smaller, officially terminated/defaulted loan pool (totaling ~€7.8M as of mid-2025) has been minimal. In April, May, and July combined, roughly €308k was recovered. In other words: Approximately 1% per month.
• The Missing Report: InSoil did not publish a recovery report for June 2025, for reasons unknown, so we calculated this ourselves based on available data.

This low recovery velocity directly challenges the narrative that future recoveries will rescue the portfolio's returns. The slow pace creates the dangerous illusion of high returns, as punitive ~36.5% annual penalty interest accrues on paper. In practice, long enforcement cycles cap what can realistically be collected. The far more likely outcome is an eventual write-off, where much of the accrued interest proves to be phantom income, and the investor's principal remains locked in a high-risk, low-liquidity trap.

Crucially, the company's own case studies of successful recoveries reveal the extreme illiquidity investors face. While a domestic Lithuanian default was resolved in a comparatively reasonable 16 months (case LT0001391), a cross-border case in Portugal took nearly three years from termination to final repayment (case PT0000209). These are the cherry-picked success stories; for the majority of bad debt not yet on a clear path to recovery, the timelines will likely be even longer.

With that context, here is how to think about the different risk segments. We avoid specific percentage forecasts, as recovery speed and leakage are highly jurisdiction-specific.

Domestic & Low-Friction Cross-Border (Lithuania/Latvia)

These loans should fare best. In Lithuania, the platform has the home-field advantage of local enforcement. In Latvia, a similar Baltic legal framework reduces friction, which is reflected in its low 4.4% delinquency rate. But "best" is relative. Investors should still expect multi-year timelines and meaningful haircuts, with the added, unquantified costs of any potential backup servicer transition.

Cross-Border Enforcement: A Predictable Disaster

For loans in Poland, Portugal, and Bulgaria, the situation is far worse. These face every conceivable headwind: jurisdictional complexity, higher legal costs, and longer enforcement timelines. The platform's own data confirms this, with sky-high delinquency rates of 24% to 33% in these countries. For these loans, deeper losses and longer waits are a near certainty.

Green Loans: An Unquantifiable Mess

This category is essentially a venture bet masquerading as a loan. Without a published legal waterfall, verified carbon sales, or any evidence of distributions to retail investors, estimating recovery is pure fiction. Add Key Carbon's priority position following their bailout, and retail investors are betting on the leftovers from an unproven process. The execution risk stack - verification, registry acceptance, carbon price volatility - makes a near-total loss of capital a plausible outcome.

The Bottom Line on Recoveries

Focus on what's observable: the current recovery pace is slow, cross-border complexity will compound losses, and Green Loans lack the basic transparency to even begin an assessment. Investors should plan for extended illiquidity and significant principal losses outside the narrow band of A+ and state-guaranteed Lithuanian loans.

The Path to a Positive Rating

Our current negative stance is based on the platform's observable performance and structural flaws. It is not permanent. We would fundamentally reconsider our rating if InSoil were to implement the following specific, measurable improvements:

• Radical Transparency on Green Loans: Publish a full, loan-level legal waterfall for the Green Loan revenue stream and provide verifiable evidence of the first cash distributions to retail investors.
• Align Servicer Incentives: Replace the daily administrative fee on delinquent loans with a success-based fee calculated as a percentage of actually recovered capital. This would shift the incentive from profiting on the duration of failure to profiting on the success of recovery.
• Improve Quality Asset Flow: Demonstrate two consecutive quarters where A+ rated loans constitute more than 15% of new loan volume, coupled with a platform-wide delinquency rate below 10%.
• Disclose True Borrower Costs: Provide an audited disclosure of the weighted-average borrower fee, moving beyond the current opaque 1-8% range.

Until these fundamental issues of transparency, incentive alignment, and asset quality are addressed, our cautious and selective recommendation will remain firmly in place.

The Bottom Line

InSoil is a credible team in a hard niche. The 2024 numbers show how fast that niche can bite: losses, liquidity strain, and a bailout that prioritized an institutional partner. For retail investors today, the investable core is narrow (A+ and LT state-guaranteed), and Green Loans are, diplomatically put, still “evidence-light at the cashflow level.”

Our stance isn’t driven by one “smoking gun” but by stacked asymmetries baked into the model:

• Institutional-only guarantees for banks and institutional investors that funnel the best loans to them and create adverse selection for retail.
• Fee design that pays during delinquency, not on recovery success.
• Green Loans with first pick for institutions and no publishable retail cash evidence.
• Acute scarcity of the only segment that works (A+).

If you keep an eye on available loans (or use an automated tool to do that for you) to capture A+ / LT-ACGF only, treat the platform as ‘investable’, though constrained by ~5% supply and execution speed and with a number of unknowns attached to what happens if InSoil goes bankrupt. I’d put that at roughly 3 out of 5. For everyone else, the current rating is more representative.

In theory you can use InSoil’s auto-invest to target the same loans, but that would lead to cash drag due to the very limited availability. A more reasonable strategy would be to beep capital elsewhere liquid and move it over only when qualifying loans appear. For now, InSoil is a selective, high-risk allocation - not a core P2P holding.

Prepared August 2025. This page may contain affiliate links. Investing involves risk, including loss of principal.