Agricover Credit IFN, part of Romanian agribusiness holding Agricover Group, hopes to increase its number of customers by 200 this year, after signing a EUR 12.5 million credit agreement with the International Finance Corporation (IFC), part of the World Bank Group, which will enable the Romanian institution to diversify its product portfolio with investment credit.
Agricultural financing solutions are in their early days in Romania but the sector is expected to develop considerably over the next couple of years, as agriculture will become a focus for banks and financial institutions, thinks Ana-Maria Mihaescu, IFC Romania chief of mission.
The IFC has recently granted a EUR 12.5 million credit to Agricover Credit IFN. The funds will enable the non-banking financial institution to diversify its credit portfolio for local farmers to include investment financing solutions for agricultural equipment acquisitions and farm expansion and modernization, in addition to existing working capital credit, said Liviu Dobre (pictured), general director of Agricover Credit IFN.
Credit will be available in euro to local companies or registered sole traders active either in the vegetal production sector or zootechnics, for a period of up to 36 months with a 20 percent advance and two annual reimbursements.
After the company managed to increase its credit volume by 54 percent in 2011, Agricover Credit IFN hopes to boost the figure by an additional 33 percent this year, totaling RON 400 million (approximately EUR 93 million). The institution had 700 clients at the end of 2011, the average credit amounting to EUR 90,000-EUR 100,000.
About 90 percent of the company’s clients are local farmers registered as companies and the remaining 10 percent are registered sole traders. The bulk of credits went to farmers in the vegetal sector (90 percent), and the rest to practitioners from the zootechnics field, but Dobre thinks there is potential for growth for the latter category.
Read more about Agricover Group’s results for 2011 and objectives for this year in next week’s print edition.