Information for fruit and vegetables business in CIS
Special programs of farm loaning help farmers raise funding
As known, fund raising is one of problems for small farms. Even sustainable farms can hardly get loans easily, as many banks consider agricultural loaning to be a general risk. This year the Agricultural Marketing Project (AMP) jointly with NADRA bank tried to change the situation for the better in Odesa oblast. Though the task was really complicated for the banking sector in the beginning of 2005, this season NADRA bank granted loans worth USD 82,500 to eight farms in Odesa oblast under the assistance of the Loan Specialist working in Odesa AMP office. To this moment three farms have fully repaid loans before the deadline, in spite of very complicated conditions observed this year. Four farms are punctually keeping to repayment schedule; their financial situation and stored produce guarantees no troubles to repay the loan, to the opinion of the bank and AMP specialists. Only one farm experienced problems with timely payments, still the loan is expected to be fully paid in this case too.
To the opinion of Oleg Stoyanov, the Loan Specialist of Odesa AMP office, this year experience may be considered as successful both for farms and the bank. We hope that the other banks and farmers will be encouraged by this positive example, cause many of them still hesitate to grant or apply for loans. Next season, the number of loans granted to Odesa oblast farmers is expected to double thanks to consulting and other support of AMP specialists.
No doubt, loan resources will be easier assessable for small agricultural producers due to the program "Agro+" developed by six Ukrainian banks jointly with USAID Micro Lending Program. In the framework of this program the set of loan documents is supposed to be minimized, as well as period for loan approval. As to our experience, nowadays from three weeks to 2.5 months pass from the first visit to bank and formation of the document package to the loan granting. The maximum granted loan will be about USD 58,000. As planned, by the end of 2006 "Agro+" is supposed to cover all the territory of Ukraine. Small and medium entrepreneurs from Kherson, Mykolaiv, Odesa, Dnepropetrovsk and Zaporizhzhya oblasts have already got the opportunity to apply for loans and get them in the leading Ukrainian banks in the framework of this program (NADRA, PRIVATBANK and FORUM banks participate in this program in Odesa oblast).