New bank to offer 'cheap' loans to businesses
A state-backed bank set up to help provide cheap loans to small and medium sized businesses is expected to announce new lending initiatives for the agricultural sector in the new year.
The head of the Strategic Banking Corporation of Ireland said it was looking at tailoring specific products for the agriculture sector, including more flexible forms of finance for farmers to allow them to react to market volatility.
The SBCI works through third-party lenders, giving them money at low interest rates which are then passed on to SMEs. It said lending is taking place throughout Ireland and across all sectors. The body has up to €800m to lend as part of its first phase of operations.
It comes as the Irish Farmers' Association said the high cost of borrowing faced by farmers who are investing in their businesses is unacceptable and must be addressed.
"The latest figures from the Central Bank show conditions for SMEs, including farm businesses, are tougher in Ireland than almost anywhere elsewhere in the Euro area, both in terms of cost and availability of finance," said IFA President Eddie Downey.
"The withdrawal of a number of commercial banks following the credit collapse has led to a significant increase in market concentration, and erosion of competition, which has in turn contributed to more difficult lending conditions."
IFA farm business chairman Tom Doyle, said figures from the Central Statistics Office show that agriculture and the agri-food sector have been a driving force of export-led recovery.