Where to get a loan for farmers

Unfortunately, government support for the agricultural sector in the form of land allocation and subsidies is insufficient to run agricultural business. It's not news that without credit resources, it's difficult to develop agricultural activities and solve current financial issues.

Financial challenges faced by agricultural producers

1. Equipment. Without machinery, it's impossible to increase livestock numbers or process large areas of land. High-quality machines that increase yield per plot cost accordingly.

2. Spare parts. Equipment breakdowns during sowing or harvesting campaigns can cost a crop. You need to have spare parts in stock, as delivery may take a long time.

3. Fuel. Fuel consumption increases significantly during harvest season.

4. Seeds and animals. Crop farmers need seeds for planting, while livestock farmers need to regularly purchase animals to increase herd size.

5. Wages. Both farmers and large enterprises spend large sums on paying wages to hired workers.

If crop farmers face problems mainly during sowing and harvest, livestock and agro-industrial producers need funds for development throughout the year. According to the article https://kazakh-zerno.net/160882-gde-vzjat-kredit-na-agrobiznes-v-kazahstane/, similar difficulties arise for farmers in Kazakhstan.

Where can farmers obtain a loan?

In Russia, preferential lending for agricultural enterprises is in place. It is regulated by the Government of the Russian Federation Decree No. 1528 of December 29, 2016.

According to this program, banks, including Sberbank, VTB, and Rosselkhozbank,

provide short-term and investment loans at a fixed annual rate from 1% to 5%.

However, such loans are usually granted in large amounts. As in Kazakhstan, banks rarely provide loans for small requests from agricultural producers. If a small loan is needed for current operational expenses, small farms are better off applying to microfinance organizations.

Advantages of obtaining a loan from MFIs

• No collateral. Banks generally lend money against collateral, and may refuse loans to farmers if the collateral is insufficient. MFIs, however, provide loans to farmers without collateral.

• Wide availability. Microfinance organization services can be used in any region: even in areas where there are no banks or very few.

• Online lending. Both individuals and legal entities can apply for a loan online within half an hour, receiving approval and signing the offer electronically.

• Loan amount. In MFIs, you can obtain a loan ranging from several thousand rubles to a couple of million. Each service independently sets loan conditions — you can find the most favorable rate.

Moreover, not only banks participate in preferential lending programs for the agricultural sector: some MFIs also provide loans at low interest rates to livestock and crop farmers. In any case, farmers have a wide range of options for obtaining loans.