Glanbia launches new €100m milk loan fund for farmers
A €100M fund linked to the milk price has been unveiled for dairy farmers looking to expand in the face of volatility on the markets.
The 'MilkFlex' fund will provide loans from €25,000 up to €300,000 to dairy giant Glanbia's 4,800 milk suppliers, with key triggers that can adjust the repayment terms in times of low milk price.
Siobhan Talbot, the group managing director of Glanbia, said the fund aimed to deliver competitively priced and structured dairy finance.
"This product is designed to match the cash flow generated by a dairy farm enterprise, with no repayments during certain times of low prices and increased repayments at times of high prices," Ms Talbot said.
Around €50m of the fund will be available from May, with the investment fund coming from the partners Rabobank, the Ireland Strategic Investment Fund, Finance Ireland and €6m from Glanbia Co-operative Society.
The interest rate charged on the loans will be at a variable rate of 3.75pc above the Euribor cost of funds which is currently at zero.
Figures from the European Central Bank show the average rate charged on loans to small and medium enterprises (SMEs) is 6.56pc in Ireland. It is three times above the rates in France and double that of Germany's and Spain.