During the 1st quarter of year 2011 the Fund has issued more than 100 credit guarantees 25-04-2011

During the 1st quarter of year 2011, the Rural Credit Guarantee Fund (hereinafter referred to as the Fund) has issued 102 guarantees for 24,4 million LTL for 37,7 million LTL of credits granted to farmers, rural entrepreneurs and processing companies. The total amount of guarantees for these economic entities account for 883,1 million LTL and it allowed to borrow from the credit institutions almost 1,5 billion LTL.

As compared with the same period of 2010, when the double growth of guarantees has been fixed, this year the total amount of guarantees for the credits granted to farmers, rural entrepreneurs and processing companies has increased by 40 percent. Last year, during the same period 65 guarantees have been issued for 17,1 million LTL containing 26,3 million LTL of credits.

„Although the amount of the issued credits with guarantees this year is smaller, but the farmers and rural entrepreneurs are borrowing from the credit institutions more and more“ – states the director of Rural Credit Guarantee Fund D.Čukauskienė. According to her, it shows, that each project implemented by economic entity is carefully planned and the borrowing is more responsible. Average amount of credit this year reached 370 thousand LTL, last year – 420 thousand LTL.

The largest shares of credits with guarantees comprise credit for implementing investment projects (80 percent of all credits), the rest for credits to supplement current assets. The implementation of investment projects usually is supported by EU funds (80 percent of all investment credits). As compared to the same period of 2010, the amount of credits for such projects has increased by 50 percent – 24,4 million LTL (to the same period of 2010 – 15,3 million LTL). 

„The successful assimilation of EU funds shows, that investment in agriculture is needed“ – the director D.Čukauskienė is saying „this is the contribution of credit guarantees issued by Rural Credit Guarantee Fund and a financial engineering measure Credit Fund, that enables farmers and entities processing agricultural produce to borrow from credit institutions on easy terms”.

The main borrowers with the guarantees remain farmers, they received 80 percent of all guaranteed credits granted to farmers. Traditional agricultural sectors being financed are crop production and stockbreeding, credits were used for purchasing agricultural machinery, equipment, for industrial construction and reconstruction. Farmers and rural entrepreneurs from Ukmergė, Jonava and Anykščiai appeared to be the most active borrowers with the guarantee.

During the 1 st quarter of 2011, the largest shares of guaranteed credits were granted by SEB Bankas (24 percent of all credit with guarantee), DnB NORD Bankas (19 percent) and Šiaulių Bank (18 percent). If compared to the same period of previous year, the amount of credits with increased mostly in Citadele Bank, much more active were and credit unions.

Rural Credit Guarantee Fund issues guarantees to banks and credit unions for investment credits and credits to supplement current assets granted to farmers, rural entrepreneurs and processing companies. The Fund guarantees to financial institutions the repayments of up to 70 percent of the unpaid credit amount (80 percent of the unpaid credit amount is guaranteed for credits granted to young farmers). Rural Credit Guarantee Fund administrates a measure of financial engineering Credit Fund, which enables farmers and entities processing agricultural produce to borrow from credit institutions on easy terms.