New services offered by Hansabankas are expected to increase independence of choices and competitiveness in financing of agricultural business
2008-03-26 Back
Hansabankas started implementing a program of lending to agricultural and forestry sectors. It has designed four new bank products to farmers, agricultural and other agriculture/forestry-related companies: investment loans for agriculture, direct benefit loans, seasonal loans and investment loans for forestry.
Says Linas Paltanavicius, Head of Corporate Banking Division of Hansabankas: "Agriculture is a specific business area which is different from others not only in terms of competition environment, size of EU financial support, seasonal impacts but also enterprise in this sector. We have, therefore, duly considered agricultural business-related needs and expectations and agricultural companies’ (farmers’) ambitions for financial independence and the retaining of competitiveness and, as a result, designed a program of lending to agriculture. Our aim is to provide our new customers with more financial independence and choices of planning their day-to-day business and development".
According to L. Paltanavicius, Lithuanian banks do not currently have sufficient financial services to meet agricultural business needs, meaning that agricultural companies and farmers are very dependent upon domestic business environment. For instance, when farmers buy new goods, they have often to do it by postponing their payments despite that in many cases it is more beneficial/expedient to take loans and use the borrowed assets to pay for the acquired goods the same day given availability of better prices. "This in mind, we have come forward with new solutions that are expected to contribute to managing agricultural financial matters more effectively", concluded L. Paltanavicius.
Hansabankas services of financing of agriculture and forestry are aimed at the meeting of experienced agricultural companies’ and promising young farmers’ needs, expectations and ambitions.
The Bank’s investment loans for agriculture are supposed to be used for modernization and development of agricultural business (farms). Investment loans for forestry have been designed to finance acquisition of forests. Direct benefit loans are expected to be helpful to farms who receive direct benefits from the European Union for declared land under crop.
As to seasonal loans, they are expected to be in demand by farmers mainly (as they need money to pay for seasonal work and settle the suppliers’ bills).
