Contracts on crediting of farms signed with nine banks

The Ministry of Agriculture, Forestry and Waterpower Engineering has signed contracts with nine business banks which will participate in short-term and long-term farm crediting programs.

The contracts have been signed with “Komercijalna banka”, “Vojvođanska banka”, "National Savings Bank", "Kulska banka", "Hypo Alpe Adria bank", "Panonska banka Novi Sad", "Erste bank", "Meridian bank" and "Kontinental banka" from Novi Sad.

For the year 2006, 3.5 billion CSD have been set aside from the agrarian budget, 2 billion CSD of which are intended for long-term and 1.5 billion CSD for short-term crediting.

This year, 6-7 billion CSD should be invested into the crediting of registered farms, and that sum will be increased by over three billion CSD from the repayment of the credits which were approved during the last two years.

Short-term credits are intended for procurement of means for preparaton of sowing and procurement of necessary inputs for agricultural production.

The amounts have been determined according to the size of registered agricultural land – 12,000 CSD fr land of up to 1 ha, 60,000 CSD for land whose surface is between 1 and 5 ha, 120,000 CSD for land of up to 10 ha and 240,000 CSD for land bigger than 10 ha.

The credits are approved with repayment period of 12 months, interest rate of 5% and fee of 1% on annual basis without foreign currency clause.

The interest rate, together with the principal, is to be repaid after expiration of the credit, whereas the fee is collected after the approval of credit and before the money is given.

Long-term credits can be used for construction and procurement of irrigation systems, as well as related equipment, procurement of agricultural machines, planting of perennial plants, building of plastic and glass greenhouses and for cattle breeding.

These credits are approved with repayment period of up to 5 years, interest rate of up to 3% on annual basis. Foreign currency clause is included in the contract and it is possible to postpone repayment of the principal on period of 1-3 years.

The lowest possible amount of long-term credit is €5,000, whereas the highest amount is €200,000. For credits of over €15,000, it is necessary to submit business plan.