Ulster Bank's first pasture loan offers farmers €60,000
Ulster Bank has launched its first ever "pasture loan" as the bank tries to capture a larger share of the agricultural lending market.
Loans of up to €60,000 will be made available over a five-year period to dairy, beef and sheep farmers who want to improve their grass production and profitability. An arrangement fee of 1pc will apply.
Ulster Bank is understood to be making a concerted effort to build up its business in the sector. Farmers are a big source of lending business for Irish banks - around a quarter of all lending to small and medium enterprises (SMEs) last year went to farmers, even though they make up just 6pc of the workforce.
Farmers traditionally have substantially lower levels of credit difficulties than other SME sectors. But lending has yet to match boomtime levels. Loans to the sector peaked in 2009 at €5.5bn. The figure now stands at around 3.7bn to 3.8bn.
AIB and Bank of Ireland are understood to lead the marketwhen it comes to farm lending.
Bank of Ireland has a €1bn fund in place for farm investment and has trebled the number of agriculture lending managers it has.
AIB has a €500m agri-lending fund and has doubled its agri-manager numbers.
Ulster's new pasture loan product is aimed at helping farmers earn more money from their grasslands.