AIB has launched the bank’s second €500m loan fund to support the development of Ireland’s agri sector throughout the country.

According to AIB, the previous €500m fund launched in April 2014 has seen more than 90% drawn down by farming customers for use as working capital, capital expenditure and asset finance requirements.

The latest fund is supported by discounted Strategic Banking Corporation of Ireland funding for eligible projects, at a reduced rate of 0.4%.

Bank of Ireland approved a total of €580m for the agriculture sector in the first 10 months of 2015. This was an increase of 13% over the previous year, Mark Cunningham, director of business banking, Bank of Ireland, told the Joint Oireachtas Committee on Agriculture, Food and the Marine.

The other key points were:

  • Bank of Ireland has more than 50% share of new non-property lending to SME/agri sector.
  • Agri lending represents 23% of all front book lending to business customers and over 60% of all business lending originating in rurally based branches.
  • Approved 93% of agri credit applications.
  • €1bn investment fund in place to support development and expansion at farm level.

    • Pasture loan

    Ulster Bank has seen increased deamand for agri lending and in particular the first ever pasture loan they launched at the start of the grazing season. Available to both new and existing customers, it is aimed at improving grassland management practices on their farms and increase profitability.

    The loan, which can be up to €60,000 per farmer over a five-year period, is designed to assist dairy, beef and sheep farmers who are seeking to improve their grass production and utilisation. Reseeding levels in Ireland are traditionally low compared with best practice guidelines, with less than 2% of the total grassland area reseeded annually.