President of Ukraine has signed the Law 1865-IX “On the Fund of partial credit guarantee in agriculture”, which determines the legal status, characteristics of formation and principles of the partial guarantee fund of credits in agriculture, establishes the procedure for determining the criteria for business entities and financial institutions, commitments under loan agreements between which can be guaranteed by the Fund. This is reported by ProAgro Group with reference to the information of the Ministry of Agrarian Policy.
“The main purpose of the law is financing and access to credit of small and minor farmers. And the Fund will provide guarantees of up to 50% of the outstanding principal amount and guarantees for the term of the loan agreement, but not more than 10 years. The main condition is that agrarians must own and/or use no more than 500 hectares of land and specialize in the primary production of agricultural products,” said Minister Roman Leshchenko.
He added that the law clearly specifies the Fund’s management procedure with the participation of state representatives and independent directors who guarantee its independence and unbiased approach. And what is important, the Fund will offer portfolio guarantees, which banks will use as part of the main collateral.
“If we are talking about banks, they will be subject to similar criteria that are now in place within the Ministry of Finance of Ukraine, the National Bank of Ukraine to the banks that now take part in government programs. That is, guarantees will be provided only for loans granted by financial institutions that have concluded a cooperation agreement with the Fund and meet the eligibility criteria approved by the Fund Council,” the Minister explained.
