Farmers face uphill battle to obtain credit from banks

  • Farmers face uphill battle to obtain credit from banks
    FarmIreland.t. E.
    ICMSA has questioned the bona-fides of banks regarding their willingness to Finance farmers in the current fodder crisis.
    https://www.independent.ie/business/farming/agri-business/farmers-face-uphill-battle-to-secure-credit-from-the-banks-37190510.html
    https://www.independent.ie/regionals/braypeople/news/article34845520.ece/1065f/AUTOCROP/h342/2016-06-29_wic_22381176_I1.JPG

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ICMSA has questioned the bona-fides of banks regarding their willingness to Finance farmers in the current fodder crisis.

All major banks encouraged farmers to join with them now to help Fund the needs of winter feed and other costs associated with drought.

However, Shane O’loughlin of the business of the Committee ICMSA farm argued that the asks the farmer to increase the overdraft was unceremoniously rejected, or excessive demands in terms of documentation is currently a relatively small loan growth.

Farm organizations warn of serious debt to create at the farm level, especially on highly stocked dairy units, resulting in huge bills for feed incurred during the long winters and hot summers.

But the banks insisted that they have not experienced a significant increase in loan applications.

Sean Farrell from Bank of Ireland said the Bank saw more requests the farmer to extend the overdraft, but has not received what he described as a “distress signal” as of yet. However, he said that the increase in loan applications for the farm was most likely in September.

“The first port of call for farmers in a cooperative or merchant, but in September and October we will see more demand [for farmer loans] and we are ready for it,” said Mr. Farrell.

He said that Bank of Ireland menu for farmers, including the extension of overdrafts, short-term stock loans, or will only the interest on the loan for the period.

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ANNE-Marie Butler, Ulster Bank said last week the meeting of the ICMSA in Mallow that farmers need to make a budget to fit their budget fodder for the coming winter.

“We need to look forward. Make your budget fodder, but equally do your budget,” she said.

Mrs. Butler said she appreciated the pressure the farmers at the moment, but she stressed that the funding requirement to feed in winter is just as important as the sources that nourish.

“What we find across the country from Ulster Bank is that customers are not yet approaching the shore. We do not observe an increase in the use of the overdraft or we do not see people to go the extra finances. What I hear from clients is the question about where they will be fed”, she explained.

She told the farmers that they need to approach their banks early to put structures to Finance their on-farm consumption of feed for the winter.

Ulster Bank announced last month a Fund of 15 million euros to alleviate the current difficulties in the agricultural sector. It is open to existing and new customers-farmers.

AIB stated that he was aware of the difficulties faced by farmers and online applications for loans on an individual basis. Among the options for farmers results of the Bank are extensions of the overdraft facility to EUR 60 000 or a term loan.

But Mr O’loughlin said that banks have to comply with their public expressions of support for farmers with “specific support measures for their clients.”

The representative of ICMSA has urged banks to provide low interest loans “in order to eliminate the deficit in working capital on farms”, and for credit organisations, to improve their processes of applying the loan.

“The volume of documentation required in some cases, no just ridiculous,” he said.

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