Ministry of Agriculture Launches Special State-Backed Farmer Loan Scheme Under the Israel Small and Medium Enterprises Authority (ISMEA)
Here’s what’s new: a loan scheme enabling loans if up to NIS 750 thousand spread over up to 10 years.
The Ministry of Agriculture estimates the credit that will be extended to the farming sector will total approximately NIS 110 million
Minister of Agriculture, Uri Ariel: “Continuing our work for the farmers. This time, too, we have worked for the farmers’ welfare. We have created special schemes favoring farm enlargement, which will benefit and improve their profitability going forward. This move will lead to placing the conditions for farming on a par with all other businesses in Israel, ultimately leading to stability in this growth sector”.
The Ministry of Agriculture, together with the Ministry of Finance, has created specialized state-backed loan schemes for the farming sector, including a long-term loan track enabling farmer loans repayable over a 10-year period(!). This move is expected to help farmers solve their financing problems, leading to progress in Israeli farming.
The Fund’s loans will be state-backed to an increased percentage of 85% of the loan amount. They will be extended to farmers producing fresh produce in the agricultural sector. The proposed schemes include a medium-term path and a long-term path. The credit that will be extended to the farming sector is expected to total approximately NIS 110 million. This new scheme will be enacted under the existing State-backed Small Business Fund, meaning the farmers will have the option of submitting a credit request with one of the existing Fund paths, as is the practice today (it will not be possible to obtain two concurrent loans under this framework).
The banks through which the state-backed loans for small and medium enterprises are Bank Leumi, Mercantile Discount Bank, Mizrahi Bank Tefahot and the First International Bank of Israel. The loans will be extended in accordance with the terms of the Fund.
The suggested loan paths are:
1. Medium-term loan path - a loan of up to NIS 500 thousand for up to five years with up to six months’ grace period.
2. Long-term loan path - a loan of up to NIS 750 thousand for up to ten years with up to six months’ grace period.