AGRO FI MICRO – Microcredits in agriculture for young people
About this good practice
The eligible applicants are young farmers or a small farm.
Loan amount: Min: € 5.000, Max: € 25.000
Young farmers are considered as a vulnerable target group, so the interest rate is 0% and they do not even require any special insurance. They can use the funds for whatever they want, mostly for further development and to buy equipment, machinery.
The total repayment period of the loan shall be a minimum of 12 months and a maximum of 60 months from the date of signature of the contract.
The product was launched last autumn for 3 years, but will certainly be offered in the future, because there is a lot of interest, demand and applications. It is an open call and funds will be available throughout the year.
The entire process is easy and digital.
The customer submits the application via the portal and receives the contract electronically for digital signature.
At the end of its implementation, the project must achieve at least one of the following objectives:
• Preservation of agricultural production
• Restoration of production potential due to natural disasters
• Improving liquidity
• Achieving greater market orientation and competitiveness
• Developing agricultural holdings by moving towards green, digital and climate-neutral agriculture
It is up to the applicant to decide which objective(s) to pursue. If a contract is signed, the implementation of the selected objective(s) will be verified by the SRDF.
Resources needed
The AGRO FI Micro product is funded by the Ministry of Agriculture, Forestry and Food (State Budget). € 3,307,500 available in 2023-2027. Depending on the success of the product and demand, calls for tenders may be continued at a later stage. This will be discussed at the end of the period.
Evidence of success
According to the representatives of the Farmers' Youth Union, it is a necessary and interesting product that addresses the problems of young people in obtaining soft loans for small projects for which the farmer does not have to offer any collateral to secure the loan.
By mid-April, 79 applications had been received, of which 56 had already been approved for a total amount of € 1.267.000. 7 applicants had withdrawn, 9 had been rejected and 7 were still pending at the cut-off date.
Potential for learning or transfer
AGRO FI MICRO is highly transferable to other regions due to several key factors:
- Accessibility: Zero-interest loans and no collateral requirements make financing accessible to young farmers, addressing a common challenge in many areas.
- Digital Efficiency: The fully electronic application and contract process enhances convenience and reduces administrative burdens, which can be replicated to improve efficiency elsewhere.
- Flexibility: Loans can be used for various needs, supporting diverse agricultural goals, which is adaptable to different regional contexts.
- Clear Objectives: Requiring specific developmental objectives ensures alignment with broader policy goals and accountability, making outcomes measurable and transparent.
AGRO FI MICRO offers a promising model for supporting young farmers through accessible financing, digital innovation, and clear developmental objectives. Its principles and mechanisms can inspire similar programs tailored to the specific contexts.
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Good practice owner
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