Cutting Rates on Agri Loans to Spur Sales of Machinery

20.5.2016.

Farmers and land owners looking to upgrade or modernize their machinery and equipment or in need of an inflow of ready cash just to keep themselves afloat need look no further as banks have made tie-up arrangements with various agricultural equipment dealers offering agricultural loan schemes.


Signing the agreement with four national agricultural machinery dealers — Agropanonka, Titan Machinery, Almex and VGP— Hypo Alpe Adria bank offered special interest-free loans for purchasing farm machinery and equipment.

"These are agricultural loans with subsidized interest-rates granted by Hypo Alpe Adria in cooperation with the Serbian Ministry of Agriculture and Environmental Protection as part of the subsidized lending initiative. The cash down payment of 20% coupled with loan application fees ranging from 1% to 1.5% and the purchased goods used as collateral were incentive enough to stir interest among farmers", said Zlatibor Valjan with Hypo Alpe Adria Novi Sad Sales Management Division.

According to Valjan, the scheme has proved successful so much so that the total value of the signed machinery contracts was 800,000 – 1,000,000 Euros over the course of seven days and it will continue up until the end of July with many other agricultural equipment suppliers on board.

OTP Novi Sad reported having negotiated with as many as 3,000 persons – holders of registered farms and agricultural cooperatives – nationwide.

"What we offer are low-interest short-term domestic currency loans for sowing and procurement of intermediate goods with the repayment period of 12 to 18 months; credits for purchasing new and used mechanization at the annual interest rates of 1.99% (up to 3 year term) and 2.99% (5-year term), respectively", said Andjelka Dzunic, Customer Relationship Manager at OTP bank.

Farmers took special notice of a range of short-term interest-free loans with the one-time fee of 6%, said Dzunic.

Along with the banks, on the 83rd annual International Agricultural Fair’s list of exhibitors were leasing companies.

In cooperation with Titan Machinery and Agroglobe, there are lease agreement deals (5-7 year term) at the fix interest rates of 3.99 and 4.99%, said sales manager at Sogelease Serbia, Zoran Calic.

Many farmers are coming to our booth asking about our lease products, and that’s great for everyone wishing to invest in new machinery because monthly payments are considerably lower than those of a standard bank loan, said Calic.