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Irish farmers have been effectively locked out of a €1bn loan scheme because no Irish banks “have asked to take part”.
The scheme was launched in April by then European Commissioner for Agriculture Phil Hogan and European Investment Bank (EIB) vice-president Andrew McDowell.
It provides European countries with access to the €1bn fund and is aimed at young farmers in particular, promising lower interest rates and a 15-year repayment period.
Pilot loans
Two pilot loans of €275m were immediately implemented in France through the scheme. However, a response from Commissioner Phil Hogan to one young Irish farmer seen by this newspaper, states: “In Ireland, the scheme is not yet rolled out as no banks have asked to take part.
“However, there is a specific loan programme for agriculture and SMEs in place currently in Ireland, called Future Growth Loan Scheme (FGLS).” Despite this comment, it is understood that some banks in Ireland were not asked to take part and, even with the backing of the Irish Commissioner, the loan scheme was not considered for the Irish market because the FGLS was in place.
The FGLS has been held up repeatedly by Government as a Brexit support tool for farmers and provides up to €50m in funding for farmers.
Almost one-third of funding had already been drawn down by mid-September.
If the remaining 390 farmers who have been granted pre-approval draw down the average FGLS loan amount of €115,000, then there will be an over-run of up to €4m.
Gatekeepers
The gatekeepers for introducing new loans onto the market, the Strategic Banking Corporation of Ireland (SBCI) said they felt the FGLS “was the most effective solution for young farmers’ financing needs at present”.
“But it remains open to introducing additional supports as farmers’ needs and market conditions evolve.”
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