Ukrainian banking institutions for the period from mid-March to April 5 issued loans to farmers as part of the state program to support the sowing campaign in the context of the Russian military invasion of Ukraine for a total of UAH 1.79 billion, according to the website of the Ministry of Agrarian Policy and Food of Ukraine on Wednesday.
At the same time, it is specified that currently 80% (UAH 1.5 billion) of the provided borrowed funds were portfolio guarantees, and 900 agricultural producers from different regions of the country received access to financing.
Most of all loans for the specified period were attracted by farmers of Kirovohrad region – UAH 405 million (22% of the total), Vinnitsa region – UAH 365 million (20.4%), Dnepropetrovsk region – UAH 267 million (14.9%), Odessa region – UAH 161 million (9%) and Lviv – UAH 159 million (8%) 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 6 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.
“Lending to farmers is one of the main priorities of banks. The conditions for granting loans are simplified as much as possible. Moreover, banks lend to our farmers even in those regions where there are battles, because they need to sow, and (…) people go out to their fields,” the ministry quotes its head of Nikolai Solsky.
The agency clarified 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.
