Ukrainian banks provide UAH 5.43 bln to farmers for sowing campaign during war

For the period from mid-March to April 13, Ukrainian banking institutions provided loans to farmers under the state program to support the sowing campaign-2022 for a total of UAH 5.43 billion, including loans and portfolio guarantees for the week of March 6-13. UAH 3.64 billion

The relevant data on the financing of the sowing campaign in the context of the Russian military invasion of Ukraine was published on the website of the Ministry of Agrarian Policy and Food of Ukraine on Thursday.

“In fact, over a week, loans were issued for more than UAH 3.6 billion for more than a thousand farmers. Banks took a rather fast pace to cover the needs of our agricultural producers, who are now undergoing a sowing campaign. Today, agricultural loans can be issued by 22 Bank, and the goal of the state is to increase lending to the agricultural sector up to UAH 40 billion, that is, almost eight times more,” the department quotes its head, Mykola Solsky.

It is specified that 80% (UAH 4.41 billion) of the provided borrowed funds were portfolio guarantees, while 2.08 thousand agricultural producers received access to financing in total (1.18 thousand in the last week).

Most of the loans for the sowing campaign were attracted by the agrarians of Kirovohrad region – UAH 1.81 billion (+UAH 1.4 billion for the week), Vinnitsa region – UAH 944 million (+UAH 579 million), Dnepropetrovsk region – UAH 738 million (+UAH 471 million), Odesa – UAH 549 million (+UAH 388 million) and Lviv – UAH 348 million (+UAH 189 million) regions.

According to the Ministry of Agrarian Policy, loans up to UAH 60 million under this program are issued at 0% per annum (under the state financial support program “Affordable loans 5-7-9%”). The term of such lending is up to six months, and after its completion, the interest rate for borrowers will be 5% per annum. Agrarians falling under the definition of an agricultural producer can use the loan.
“Ukraine understands its defining role as a guarantor of the food security of the world, so we must harvest to feed ourselves, and also prevent food shortages and hunger in the world,” Solsky summed up in the message of the Ministry of Agrarian Policy.

The agency recalled that the government program to support the sowing campaign is being implemented by the Cabinet of Ministers, the Ministry of Agrarian Policy, the Ministry of Finance, the Ministry of Economy, the National Bank and the banking sector.

As reported, at the end of March, the Cabinet of Ministers of Ukraine expanded the procedure for issuing guarantees for agricultural producers on loans on a portfolio basis for the purchase of the resources they need for the sowing campaign in 2022, since due to the Russian military invasion of Ukraine, part of the farmers lost working capital for carrying out spring work.

Thus, within the framework of portfolio lending to agricultural producers, they will be able to obtain loans for the purchase of fertilizers, plant protection products, pesticides and agrochemicals, fuel, spare parts for agricultural equipment, as well as for replenishment of fixed assets and intangible assets, wages, rent of real estate and movable property, works and services for its operations.

The total budget of this program to support the 2022 sowing season is UAH 50 billion.

Open4Business

Tags: Ukraine, sowing, loans