The inner demagnetizing factor Ni of polymer bonded soft magnetic composites (PBSMC) varying in filler material and filler content C was measured, using a computer controlled measurement system. For all materials the results show a decrease from an inner demagnetizing factor close to the demagnetizing factor of a single particle to Ni ≈ 0 by increasing the magnetic content C. Measurement data of a selected material were compared with a model derived from an effective medium theory using the composite's effective susceptibility and show superb accordance.