The agreement between the government, the European Investment Fund (EIF) and the Strategic Banking Corporation of Ireland (SBCI) to increase the amount of funding available to farmers under the Future Growth Loan Scheme (FGLS) up to €500 million has been welcomed by the Irish Creamery Milk Suppliers’ Association (ICMSA).
That’s according to the chairman of the association’s Farm Business Committee, Shane O’Loughlin.
He said that there is still significant interest amongst farmers in investing in their businesses and that it is essential that sufficient levels of credit are available at internationally comparable low interest rates.
O’Loughlin explained:
Like all businesses, farmers need to invest in their productive assets and, as societies and markets began to move forward through the Covid-19 crisis, funds need to be available for borrowing and investment.
The ICMSA Farm Business Committee chair said it remained to be seen whether the ‘pillar banks’ would compete for that farm loan business, but he certainly encouraged them to do so.
Citing the interest rates being quoted – which are up to 4.5% for loans up to €250,000 – O’Loughlin said there was “plenty of room to manoeuvre if the Irish pillar banks were willing to compete and not see 4.5% as the minimum level”.
“Previously, low-interest loans were available at less than 3% and this should be the target,” he said.
There are many terms and conditions applied to these loans. These must not become too onerous on farmers and primary producers.
“We’ll be watching the timeframe for approval also, as this must be efficient and not pointlessly extended.”