BRD plans to increase its exposure to the agricultural sector

BRD is considering increasing its loan exposure to the agricultural sector from 8.5% to 10.6% of the total loan portfolio in the coming years, Roxana Cosmescu, executive director of the Commercial Division of the BRD network said yesterday.

"Our exposure to agriculture currently accounts for 8.5% of our total loan portfolio, amounting to approximately three billion lei. We are convinced that the Romanian agriculture will progress and we hope it will become as efficient as that of EU member countries that are far more evolved in this respect", said Cosmescu, quoted by Mediafax.

She added that one of the bank"s targets for the following years is to increase its exposure to the agricultural sector, having loans for the former account for 10.6% of the total loan portfolio.

Loans will be granted for the short term, a maximum of 12 months, and are intended exclusively for production, not for investments. The maximum amount of the loan will be the equivalent of 400,000 Euros, and the guarantee of the Fund will cover a maximum of 80% of the value of the loan, whereas farmers will need to guarantee the remaining 20%.

At the end of last year, the amount of the guarantees granted by the Fund for the Guarantee of Rural Loans was 157 million lei, for a total of 250 million lei lent out by BRD. Over the last three years, the Fund provided 428 million lei in guarantees, for a total volume of about 695 million in loans that BRD granted to farmers.

• The value of loans guaranteed by the FGCR could increase 10% this year

The Fund for the Guarantee of Rural Loans (FGCR) last year granted guarantees of up to 1.5 billion lei, and expects that amount to increase 10% this year, Veronica Toncea, the chairwoman of the Fund said yesterday.

Out of the amount of 1.5 billion lei, 80% represents support for investments, and the difference concerned production.

"In the first two months of this year we have granted guarantees of approximately 35 million Euros. For this year, we expect a 10% increase in the volume of loans that we will provide guarantees for", said Toncea.

She added that the estimates also rely on extending lending to livestock breeding.

At the same time, the minister of Agriculture, Valeriu Tabără, said that the rural areas of Romania could change significantly in the coming 4-5 years.

"This is an excellent beginning, and the agricultural sector has exceptional opportunities for creating great value", he said.