On February 5, 2018 in Dnipro city, the grand opening of project “Agricultural receipts” in Ukraine was held. The project is being implemented by the International Finance Corporation (IFC) in partnership with the Swiss Confederation.
The goal of the project is to improve the access to financial resources for small and medium-sized agricultural producers through the “agricultural receipts” financial instrument introduction in Ukraine.
If agricultural producers have different offers from banks and other financial institutions, processors of agricultural products, companies that offer seeds, fertilizers, plant protection products, agricultural machines and other equipment, services for the grains collection and preservation, the Agricultural receipts, as an additional financial instrument, can take their place in the lending market of Dnipropetrovsk region,.
“Such receipts are very popular in other countries. Many of the farmers do not have own property pledge, and in that case part of the future harvest is used as pledge. It is very convenient”, – Leah Soroka, program manager of ECA Agri-Financial Services at World Bank Global Practice (Financial Markets) Implemented by IFC said.
With a receipt you can take both money and fertilizer or seeds. It all depends on who will be the creditor – bank or agricultural companies. To issue a loan on the crop pledge is possible both with state institutions and with private entrepreneurs. The amount of interest will depend on the specific arrangements between the farmer and the lender.
“This is a very significant assistance to farmers. We plan to issue such receipts, for buying fertilizers and plant protection products in time,” – Oleksander Shcherbyna, the Chairman of Farmers and Private Landowners Association of Pavlohrad district said.
The main advantage of agricultural receipts is the speed and ease of its registration in comparison with other financial instruments.
The participants of the event on lending to the agro-industrial complex were: the Head of Programs for the agricultural sector financing development, IFC, the World Bank Group, the representative of the Agrarian Receipts in Ukraine IFC project, the Agro-Industrial Development Department of Dnipropetrovsk Regional State Administration, the Main Territorial Department of Justice in Dnipropetrovsk region, as well as the representatives of the private sector of Singent, Piraeus Bank, OTP Bank, Agrarian Fund PJSC.
Presentation of the Agrarian Receipts in Ukraine IFC project