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Varying interest rates offered by banks on the Future Growth Loan Scheme (FGLS) have been criticised by farmers.
The scheme aimed to make long-term credit available to farmers at affordable rates but a number of farmers at an IFA meeting in Tipperary complained that banks are sticking close to the maximum interest rate of 4.5% for loans under €250,000.
AIB confirmed that it is charging 4.44% for amounts under €250,000, while Bank of Ireland stated that “the indicative rate at the time of going to press is 4.02% per annum.”
Ulster Bank said it offered rates that were “lower than the maximum rules of the scheme” but did not confirm an exact figure. It adds to the litany of issues raised with the scheme, including the two-stage application process, the minimum drawdown of €50,000 and that funds must only be used for capital investment.
North Tipperary IFA chair Imelda Walsh told the Irish Farmers Journal that farmers had raised the issue of varying interest rates with her and said the situation was “disappointing”.
“Banks are playing roughshod with farmers,” she said.
“A number of farmers have talked to me about concerns of accessing credit facilities and that’s not acceptable.
“The business of banks is lending and with farmers they get huge security. Farmers always pay their bills.”
Maximum interest
The maximum interest rate is set at 3.5% for amounts over €250,000 and AIB confirmed that its interest rate was 3.44%, while Bank of Ireland said “the indicative rate today is 3.23% per annum”.
Ulster Bank again stated that its interest rates were “lower than the maximum rules of the scheme.”
The part of the scheme apportioned for the farming community was doubled last year to €120m and Ulster Bank has indicated that its FGLS fund has been fully allocated.
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