Credit Unions and Farmers: A Three-Decade Partnership | Business

Unions feel the growing confidence of farmers

Every year, more and more Lithuanian farmers trust and use the services of Kreda group credit unions. It is observed that mostly in credit unions, farmers borrow for the purchase or renovation of farm buildings and agricultural machinery and equipment, for the purchase of agricultural land, due to the difficult-to-predict season: natural elements, unfavorable weather conditions and changes in the purchase prices of production, the borrowing of working capital becomes more and more relevant every year. .

By the end of the first half of this year, the credit unions belonging to the “Kreda” group had provided farmers with more than 87 million. euro loans, or 18 percent. more than last year in the same period. This growth confirms that farmers value the attention we show them and the quality of the services we provide,” said Jolita Rėkutė, head of business development at the United Central Credit Union “Kreda”. – We are also proud of our cooperation with extremely large, well-known Lithuanian farms, whose trust we have earned, and we refinance their loans, becoming their only financial partner.”

Soft loans for farmers

The United Central Credit Union “Kreda” has signed an agreement with the company “Investicių ir verslo garantijos” (INVEGA) and will provide soft loans to farmers planning investments in the modernization and development of the farm in accordance with the Lithuanian Rural Development Program 2014-2020. Shared risk loans of the Rural Development Financial Instruments Fund, which are also provided by Kreda group credit unions, are intended for those engaged in agricultural activities, production or processing of agricultural products.

Shutterstock photo/Farming

Priority is given to young farmers and small farms: their modernization, development and long-term growth. According to this measure, 75 percent zero interest is applied to the loan portion. These concessional loans make it possible to provide financing under more favorable conditions to farmers who plan to expand or modernize their farm, purchase agricultural equipment or machinery.

Another financing tool that the “Kreda” group unions offer to small and medium-sized businesses engaged in the primary production of agricultural products – “Portfolio guarantees 3“.

This measure is especially relevant for businesses in regions for which it is important to ensure stable cash flows, sufficient working capital or the implementation of investment needs, but which does not have sufficient collateral.

By using the portfolio guarantee tool, businesses can ensure 80 percent. return of an investment loan, credit line or revolving credit amount to a financial intermediary.

Among the partners are advanced agro-sector businesses

Credit unions not only work directly with farmers, but also create added value for them by being reliable financial intermediaries for other businesses. One such example is the Raseiniai Credit Union, which cooperates with the biotechnology company Nando, which produces innovative and effective products for agriculture.

Birutė Žiūraitienė, the chairperson of the board of the Raseiniai credit union and the head of the administration, is happy that the financing provided by the union under her leadership contributes to the development of microbiological products produced by “Nando” used in agriculture, the modernization of their production process, the development of sustainable technologies that significantly improve the results of farms. In this indirect way, Raseiniai Credit Union also helps farms, farmers and agricultural companies to develop agricultural businesses.

Sustainability is an integral part of the business of the “Kreda” group of unions, therefore credit unions, by providing green loans on favorable terms to their members, create long-term value for both the environment and society.