Farm Ireland
Independent.ie

Wednesday 7 December 2016

State bank insists farm loans scheme is on track for January

Published 29/11/2016 | 15:00

Photo: PA
Photo: PA

Tensions are mounting between the key players in the delivery of the €150m low-interest loan package to farmers.

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While the main banks admit privately that they will be under pressure to get the EU-backed programme in place by early spring, the Strategic Banking Corporation of Ireland (SCBI) has insisted that monies should be available to farmers by the end of January. 

“The SBCI expects that the first loans under this initiative will be available by the end of January,” a spokesman told the Farming Independent.

He described as “incorrect” speculation that the loans scheme might not be operational until March.

“The January target date has been openly communicated to the market on a number of occasions,” he pointed out.

However, banking sources maintained that getting the initiative up and running by January will be a massive challenge.

“We’ll be making one serious push to have the scheme in place by the end of the January but we can't rush this,” a senior official with one of the pillar banks said.

“We can’t launch a loans scheme that is not considered and not fully vetted. We will be taking the time necessary to get things right,” the official insisted.

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“We are into the product development side now but we still have some process details to work out,” he added.

All of the main pillar banks have committed to being involved in the delivery of the new loans scheme. However, none have stated publicly when the loans will be available to customers.

“If things go according to plan we will have the loans package ready to go in February,” another bank representative claimed.

However, the senior official conceded that the loans scheme could be delayed until March if they encountered problems.

“But we know there would be hell to pay if that happens,” he said.

The proposed package will offer unsecured loans at 2.95pc for farmers up to a maximum of €150,000 for up to six years.

The facility can be used for some existing debt and to fund future working capital requirements.

Getting the initiative up and running as early as possible in the New Year is viewed as vital as the full €150m must be utilised before the end of September 2017 under EU rules.

However, bank sources are confident that the full €150m allocation will be drawn down by the September deadline.

Bank officials report strong farmer interest in the initiative.

Indo Farming