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“Agro-Credit is a universal program being implementing since 2013 in Georgia. This is one of the most important promises of the Georgian Dream party - cheap financial resources to flow in agriculture. " declared Levan Davitashvili
“From 2013, we started implementing the agro-credit project, which is a universal program. This is one of the important promises made by the Georgian Dream party - cheap resources to flow in agriculture. The Preferential Agro credit Project undergoes some changes and modifications year by year. Today the banks are also changed;
Therefore, we have increased the interest rate to provide more opportunities for agricultural-food sector and agro-food business. New opportunities arise for farmers during the crisis. Approximately 39% of our population is engaged in the agricultural sector. During this period, people started returning to rural areas, villages, agricultural land plots, rural residents need more opportunities to produce agricultural products on their registered lands ”Levan Davitashvili said.
A new sub-component is added to the working capital of the project - financing of working capital in plant species. Loans are disbursed in the amount of GEL 5,000 to GEL 100,000, and the state will fully fund the interest rate for 6 months in case of secured loans, in case of unsecured loans - in the amount of 17% per annum.
For the first time, since the launch of the project, the state is fully co-funding the interest rate. This will give more incentives to farmers to cultivate their lands and grow annual crops. The total amount of loans disbursed to farmers will be GEL 50,000,000. The annual budget for co-financing is 4,500,000 GEL. 5,000 potential beneficiaries have the opportunity to get benefit from the program.
• The percentage of co-financing increases in the component of fixed assets of "preferential agro-credit".
Government will finance 11% for 48 months, instead of 8% per annum. The percentage of co-financing for leasing is also increasing, instead of the current 9% it will be 12%. In the component of fixed assets and in all its sub-components, the upper limit of the interest rate imposed on banks increases, instead of 15% it will be 18%. In addition to the fixed asset component and leasing, financing is added to the production of grape processing companies and pasta products.
In total loans disbursed to farmers under the program will amount to GEL 25,000,000. The total budget for co-financing of annual interest rate amounts to GEL 4,000,000 (for 2 years).
• New component will be added to the project, the secondary collateral component to secure loans disbursed for working capital in livestock cattle breeding and hazelnut sector.
No more than 50% of the total amount of each new loan disbursed under the new component will be secured by the state within the next 18 months following the issuance of the loan or its first tranche
• A new subcomponent has been added to the project to finance the food industry.
Under the sub-component, the loan will be disbursed from GEL 1,500,001 to GEL 5,000,000, the interest rate of which will be co-financed by the Agency at an annual rate of 10% for 24 months. In addition, funding will be provided for grape processing companies, bread and bakery products, production of pasta.
A sub-component of the agro-leasing component will be added to the project to fund the food industry, where state co-funding will be 12% for 24 months. Under the program, the total estimated loans to farmers will amount to 20,000,000 GEL. The amount of GEL 500,000 will be reimbursed within the frame of secondary collateral security component.
"Preferential agro-credit" can be used by natural persons who are citizens of Georgia and legal entities registered under the law of Georgia. The beneficiary must be registered in the register of farmers / farms.
If a person wishes to get a "preferential agro-credit", he should apply to 12 banks involved in the project, in case of preferential agro-leasing, a person should apply to 4 leasing companies engaged in the project. The interested person can apply to any financial institution involved in the project, which will review the application. If the potential borrower meets the requirements of the project and the requirements set by the bank / leasing company, the financial institution will disburse preferential agro-credit / agro-leasing and sign all necessary documents with the beneficiary, after which, the agency co-finances the loan / leasing.
In 2020, the budget of the project "Preferential Agro credit" amounts to 74 million GEL. 7.5 million GEL was allocated for the project within the frame of the anti-crisis measures.