In focus of Agricultural Marketing Project - the commercial credit accessibility as a farmer's problem
The credit lending for the farmers - fruit and vegetable producers is one of the key problems on the way to the more dynamic development of this branch in Ukraine. Agricultural Marketing Project (AMP) decided to try to achieve a breakthrough in the farmers' crediting situation in the country - since the end of the previous year a pilot program has been put into action on purpose to improve the credit accessibility for Odesa oblast farmers.
The commercial bank "Nadra" showed a vivid interest to the cooperation with the Project on this issue. A session of the events conducted jointly with the bank and the market players let the bank specialists better understand this market and discover the numerous possibilities not utilized by the majority of the commercial banks of Ukraine. For example, a farmer owning 10 ha of vegetable producing lands may need 100-150,000 UAH of the operational assets, and his sale profits may be amounted up to 300-500,000 UAH.
The bank specialists jointly with the representatives of Agricultural Marketing Project conducted numerous working meetings and consultations on the issue of risk minimization for farm crediting. The result of this cooperation is the approval of two first credits to the farmers - AMP clients on sum of more than 100,000 UAH.
It is gratifying to hear that the interest of the Ukrainian commercial banks to the crediting of the medium-sized farms is growing as they perceive the advantages of such cooperation. For example, "Nadra" bank jointly with the European Reconstruction Bank is implementing the credit program "AgroUniversal" for small and medium-sized subjects of the agricultural business. This program has already started to work in Kherson oblast, and by the end of March 2005 it will be extended to Odesa oblast.
According to the information provided by Yulia Baturina, the Head of the Department of Small Business and Farm Crediting, Retail Credit Division of "Nadra" bank, in the framework of "AgroUniversal" program the credit is lent to the borrower to replenish the capital and current assets and also for the consumption purposes of up to 4 years period. The maximum credit sum is 300,000 UAH; the credit up to 5,000 UAH is lent without pledge if guaranteed by two persons. Till the end of 2005 this bank plans to lay out about 5$ to finance the small farms according to the mentioned program.
Earlier the ProCredit Bank informed about the launch of the alike program in Poltava oblast in the end of 2004. By the beginning of March 2005 ProCredit Bank has already lent about 50 credits on a total sum of 2 mln. UAH.
According to evaluations of AMP experts, the annual current assets required by fruit and vegetable producers may amount now up to 2.5 billion UAH per year (excluding potato production). This market needs the investments of not less than 15 billion UAH only on the production level, as for the most moderate assessments.