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€2m still available in low-cost agri loans from Ulster Bank

€2m still available in low-cost agri loans from Ulster Bank

DUBLIN: Ulster Bank has approximately €2m of low-cost agri loan scheme monies still available for new applications. The bank reported that the funding is available after a number of farmers didn’t progress with their loan applications, or in some instances didn’t draw down the full amount under the scheme. There was strong demand for the Strategic Banking Corporation of Ireland (SBCI) fund which offered loans at interest rates of 2.95pc. Both Bank of Ireland and AIB, which administered €65m and €60m respectively, confirmed that their funds were oversubscribed. Earlier this year Ulster Bank, which had a €25m fund, confirmed it was charging clients a 1pc handling fee.

The scheme was announced in the 2016 Budget to support farmers experiencing short-term financial pressure due to price volatility. It leveraged €11m of EU aid backed up by exchequer funds of €14m to provide an interest subsidy of €25m. Farmers could then apply for an unsecured loan of up to €150,000 at a rate of 2.95pc. The Strategic Banking Corporation of Ireland (SBCI) has provided the Department of Agriculture with an update on the progress of the drawdown of the Agriculture Cashflow Support Loan Scheme. The figures released to Fianna Fail’s Agriculture Spokesperson Charlie Mc Conalogue shoes that to the end of June there have been 3,672 loan drawdowns amounting to a total of €117,308,197. The average loan amount so far is €31,947 with some 59pc of the loans for terms of 4 years or more. The banks advise that all of the remaining €150m is committed and is in the process of being drawn down.

According to figures provided by the SBCI, dairy farmers have drawn down the highest proportion of the schemes funding at 43pc. Over 1,300 loans of on average €36,700 have been made to dairy farmers. The figures also show that beef farmers have drawndown some 41pc of the loans with average loans of €26,000 from the sector. These two sectors account for 84pc of the funding drawn down to date. In terms of regional spread, farmers in the South East and South West dominate funding drawdowns at almost 40pc collectively while farmers in the West have drawndown just 11pc of the funds to date.