The agri-sector has used up almost all its allocation under the Future Growth Loan Scheme (FGLS), according to lenders participating in the scheme.
Last summer, the government made an extra €500m available under the pre-existing FGLS. The scheme was overseen by the Strategic Banking Corporation of Ireland in partnership with retail lenders. A maximum of 40% or €200m of this funding was ring-fenced for the agricultural sector.
The competitively-priced loans under the FGLS proved popular with farmers because it allowed for unsecured lending up to €500,000, according to the IFA National Farm Business Chairperson Rose Mary McDonagh.
“The quick drawdown by farmers highlights the strong demand. The funding has fuelled significant long-term and strategic investment on farms across the country.”
“On the other hand, there has been very little uptake of low-cost loans under the COVID-19 Credit Guarantee Scheme.”
The COVID-19 Credit Guarantee Scheme (CCGS) is a €2bn fund which benefits from an 80% government guarantee and provides low-cost loans to SMEs negatively affected by the pandemic.
“The eligibility criteria for the CCGS have proven too cumbersome and prohibitive for SMEs. Media reports suggest that only some 2,249 loans, totalling €118 million, had been drawn down by early January.”
Mrs. McDonagh concluded by urging the Government to allocate additional funding to the FGLS.