Agricultural producers and other businesses in rural areas will be able to avail of low-interest loans co-financed by the Fund of Funds (FoF). This will be possible, once a procurement procedure to select the intermediary banks that will administer the lending is carried out.
Farmers will be able to borrow up to EUR 1 million. Borrowing under favourable terms will be accessible for non-agricultural operations as well, including for manufacturing of and trade in various products; crafts; all kinds of services such as accounting, utilities, repair, veterinary care, information services, care for the elderly, etc. The maximum amount in those cases will be 600 000 euros. The loan money can be used for both investment and working capital purposes.
The new FoF financial instrument will provide access to preferential lending: lower-than-market interest rates, relaxed eligibility requirements, lower collateral requirements, longer grace periods.
The FoF will co-finance two types of low-interest loans: top-up loans to complement already received project grants (with the FoF participating with up to 50% of the loan amount) and stand-alone loans (with the FoF participating with up to 70% of the loan amount).
The financing allocated to the new FoF financial instrument amounts to EUR 20 million and is provided by the Rural Development Programme (EUR 17 million sourced from the European Agricultural Fund for Rural Development and EUR 3 million from national co-financing).
Future intermediary banks are expected to leverage the public funds with private financing, bringing the total lending amount to over EUR 31 million.
