Credit Unions to roll out farm loans in mid-west

A GROUND-BREAKING initiative by rural credit unions to provide loan facilities tailored to the needs of their farmer members is to be extended from Galway into Clare and Limerick, writes Claire Fox.

‘Cultivate’ is an initiative launched by four Galway credit unions that provides farmers with short-term and medium-term loans.

The programme was launched earlier this year by the credit unions in Gort, Ballinasloe, Tuam and Loughrea.

The initiative is now to be rolled out in Clare and Limerick, with five credit unions involved.

These include four Clare societies; Derg Credit Union in the east of the county, St Francis Credit Union based in Ennis, and the credit unions in Kilrush and Ennistymon.

Cois Sionna Credit Union based in Askeaton, Co Limerick is the fifth society involved in the expansion of the programme.

Paddy McNamara of Derg Credit Union said plans for extending the programme to the five societies were at an advanced stage.

It is understood that meetings with representatives from local farming stakeholder groups, such as the IFA, the ICMSA, Macra, Teagasc and agri-businesses, are to take place in the coming weeks to establish exactly what financial services local farmers will require.

Under the Cultivate programme in Galway, farmers can borrow up to €50,000. This money can be used for a variety of purposes, including the purchase of machinery, upgrading buildings or buying livestock.

Research carried out for the Galway credit unions found that supporting on-farm cashflow was also an important requirement.

With much of farmers’ incomes coming from direct payments in October, having access to working capital through the spring and summer was cited as critically important.

As part of the Cultivate programme each credit union will appoint a dedicated agricultural officer.

These staff members undergo training in farm finance, covering areas such as cash-flow in the various farming enterprises, farm grants and direct payments.

Brendan Heneghan, project manager with the Cultivate initiative, said that appointing dedicated agricultural staff was a critical element of the overall strategy.

Mr Heneghan, who was Teagasc’s regional manager in Clare and Galway, said there was a huge opening for the credit unions to develop what he described as “relationship banking”, where farmers dealt with a dedicated staff member.