The government approved by special decision the first line of credit that will be granted on soft terms to farmers. According to the decision adopted at the last meeting, the government has made 30 million euros available as a state guarantee for lending to the agricultural sector.
"The Council of Ministers decided to approve the special state loan guarantee scheme, worth 3 billion lek, to guarantee the borrowing of entities in the agricultural sector," the decision states.
According to the documents, the special state loan guarantee scheme has been issued in favor of 11 banks operating in Albania. The interest rate at which Albanian farmers will receive loans from banks is from 0.5 to 2 percent per year.
"Now that we have this credit line from the BoA and it is strongly accessed, we need a high level of information for farmers and on the other hand a clear message for the second-tier banks that have signed it to provide loans from 0.5 percent to 2 percent, not 3.5, right," said Prime Minister Rama a few days ago.
The soft loan line for the agricultural sector is financed through two mechanisms by the state. First, the Bank of Albania credits private banks with minimal interest for the funds they provide as loans for agriculture. On the other hand, the government, through a state guarantee, guarantees up to 70 percent of the loan to the bank, in case of non-repayment by the farmer.
The term of loans under this program will range from 3 to 5 years, while the amount of loan that an individual can receive will not exceed 25 million new lek.
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