Plans afoot to net €50,000 credit union loans for farmers

MOVES ARE underway to try to coordinate a nationwide expansion of unsecured credit union loans of up to €50,000 to farmers, writes Martin Ryan.

A proposal is expected to come from the IFA National Council at a meeting in the Farm Centre today to help drive the scheme nationwide.

A ‘Cultivate’ scheme launched by four credit unions in the Galway region in March has seen in the region of €2m loaned to 450 farmers in the county, with a further €1.5m pending.

IFA business chairman Martin Stapleton said they were going to seek to meet with credit unions around the countr y to identif y those willing to lend working capital finance loans to farmers.

“The credit unions can’t compete with the banks for structured finance or term loans but they are very competitive for merchant credit,” he said.

Mr Stapleton (pictured) said that the credit unions “are awash with money” —having hundreds of millions of euro on deposit — and regard farmers as good clients.

“We are hoping to get it up and running with credit unions around the country now and follow the example in Co Galway. The Credit Union League is very interested in the members doing business with farmers,” he said.

“I believe that we are pushing an open door with the Credit Unions, who are offering a product that can be of great benefit to farmers — and the attitude to lending is ver y different from the banks.

“Unlike typical borrowers, farmers may pay back on a bi-annual or an annual basis.

“We need to get the credit unions to put a product in place that is suitable for farm lending.”

Credit unions in counties Clare and Limerick are gearing up to become active in the Cultivate scheme early in the new year, and the IFA plan is to provide countr y-wide co-ordination of the scheme piloted in the west.

Four credit unions in County Galway have been collaborating to provide a farm finance support offering. They are Ballinasloe Credit Union, Gort Credit Union, St Brendans Credit Union, Loughrea and St Jarlaths Credit Union, Tuam.

Farmers can get up to a maximum of €50,000 under the Cultivate Offering without having to provide security, for terms of up to seven years at 6.55pc interest.

Patricia Higgins, business development manager, described the response as “exceptional”, saying that to date it has far exceeded expectations.

A working group was led by Brendan Heneghan, former regional manager with Teagasc, in his capacity as project manager with the Cultivate initiative, and meetings took place with bodies such as the IFA, Teagasc, Mountbellew Agricultural College and IFAC as they worked on the loan plans.

While the League of Credit Unions is the umbrella body, each of the credit unions operate independently.