Farm Ireland
Independent.ie

Wednesday 7 December 2016

Cash from €150m low cost scheme unlikely to be released before March

Claire Mc Cormack

Published 23/11/2016 | 11:00

The €150m loan package is being delivered by the Strategic Banking Corporation of Ireland (SCBI) Photo: PA
The €150m loan package is being delivered by the Strategic Banking Corporation of Ireland (SCBI) Photo: PA

Many farmers are not aware of the strict guidelines surrounding the new €150m low-cost loan scheme being made available to the agri-secctor under an EU aid package, bank representatives have warned.

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Senior bank officials said they had received a huge level of queries regarding the loan scheme but many farmers are not clear about how the new loan scheme will work.

"I've had farmers ringing me about holding off on capital spending to take advantage of the low rates available under the new package," one senior executive said.

Other officials confirmed that a number of farmers who contacted the banks regarding new loans thought they could finance the fresh borrowings at the lower rate.

The €150m loan package is being delivered by the Strategic Banking Corporation of Ireland (SCBI) and is expected to be handled by the main banks and possibly other financial institutions such as the Credit Unions.

A spokesperson for the SCBI said the loans can be used for existing debt and future working capital requirements.

Last week the SCBI put a call out seeking lending partners to distribute the low cost loans. The closing date for expressions of interest is this Friday (November 25).

Concerns

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It is understood that concerns have been raised by some of the lenders regarding details of the scheme. However, the main pillar banks, AIB, Bank of Ireland and Ulster Bank, are expected to make the package available to customers.

Bank of Ireland's Head of Agri, John Fitzgerald, confirmed to the Farming Independent that it was the bank's intention to support the scheme, subject to "clarifying details".

Ailish Byrne of Ulster Bank also confirmed that it was the bank's intention to be involved in the scheme.

"We are continuing to engage with the relevant authorities with a view to participating," she 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.

It had been anticipated that the monies would be available early in the new year and that is the SCBI target, but it is now likely to be March at the earliest before the loans come on stream.

A scramble to authorise and draw down the loans seems inevitable as the full €150m must be utilised before the end of September 2017 under EU rules.

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