Average loan size under the low-cost loan scheme equals €32,000

The average loan size under the low-cost loan scheme has equalled €32,000 to date, according to the Strategic Banking Corporation of Ireland (SBCI).

A total of €60.2m has been drawn to date by farmers, the SBCI added. It has previously been confirmed that the entire €150m budget for the scheme, also known as the Agriculture Cashflow Support Loan Scheme, has been fully committed.

More than half the loans being advanced are for terms of four years or more, the SBCI confirmed.

By sector, 42% of loan value has been to dairy enterprises, 41% to beef and 8% to tillage, with other sectors such as sheep, pigs and horticulture also applying.

Based on progress to date, the SBCI anticipates that approximately 4,000 farmers will benefit from the scheme.

The scheme was developed by the Department of Agriculture, Food and the Marine in co-operation with the SBCI, making €150 million available to farmers at interest rates of 2.95%.

Distributed and administered through AIB, Bank of Ireland and Ulster Bank, the scheme aimed to provide farmers with a low-cost, flexible source of working capital.

It was hoped this would allow them to pay down more expensive forms of short-term debt, ensuring the ongoing financial sustainability of viable farming enterprises.

Normal bank lending criteria applies to the scheme and the terms and conditions of each individual loan are agreed between the bank and the applicant; according to the purpose of the loans and the circumstances of the farming enterprises.

Minister Creed calls on banks to reduce interest rates

The Minister for Agriculture, Food and the Marine, Michael Creed, welcomed the release of preliminary information regarding the uptake of the Agriculture Cashflow Support Loan Scheme.

“One of my priorities has been to address the impact of the change in the sterling exchange rate and lower commodity prices in some agriculture sectors.

I am pleased at the very positive reaction by farmers to the scheme, which has proved that significant demand exists for low-cost, flexible finance.

“I am currently meeting with the Chief Executives of the participating banks to discuss this and other access-to-finance issues relating to the agri-food sector.

“I am asking the banks to respond positively to the demand that has been demonstrated by reducing interest rates and providing more flexible terms for cash flow loans in the future,” Minister Creed said.