‘Ulster Bank cashing in on low-interest loan scheme’
ICSA Rural Development Chairman Seamus Sherlock has slammed Ulster Bank for “profiteering” on the agricultural cash-flow support loan scheme.
Ulster Bank is charging a 1% set-up fee for farmers availing of the special 2.95% interest rate, according to Sherlock.
The scheme was developed in co-operation with the Strategic Banking Corporation of Ireland, and is providing €150 million in low-interest loans to farmers throughout Ireland.
It has previously been confirmed that the entire €150 million budget allocated to the scheme has been fully committed.
The government “leveraged” some €11 million of EU exceptional adjustment aid with exchequer funds of €14 million, which provides an interest subsidy of €25 million.
The scheme aimed to provide farmers with a low-cost, flexible source of working capital, to support farmers experiencing short-term financial pressure, due to price and income volatility.
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.
The 2.95% interest rate, coupled with the interest subsidy means that banks should have adequate margin without resorting to additional creaming-off of money from farmers.
Sherlock expressed his disappointment in Ulster Bank, being the only bank applying this 1% set-up fee. Bank of Ireland and AIB are operating the low-interest loan scheme without recourse to additional charges.
“If all banks had taken this approach, it would have amounted to some €1.5 million taken as extra profit out of farmers’ pockets; when the total actual support is €25 million,” Sherlock stated.
“It is important to note that the huge demand and very tight time-frame for this scheme meant that, realistically, farmers had no potential to shop around and, therefore, were ‘sitting ducks’ for this egregious charge,” he concluded.