Relevant agreements have been signed with ProCredit Bank, First Ukrainian International Bank (FUIB), Alliance Bank, Agroprosperis Bank, PrivatBank, MTB Bank, which provide credit support to agricultural producers throughout Ukraine. Negotiations with another large bank are in their final stages.
Authorized partner banks finance farmers who buy nitrogen fertilizers from chemical manufacturing plants belonging to Ostchem: Cherkasy Azot, Severodonetsk Azot Association, Rivneazot.
The lending program works as follows: an authorized bank issues a loan for the purchase of nitrogen mineral fertilizers on favorable terms, while Ostchem Retail, as a representative of the manufacturer, ensures timely shipment of products to the agrarian and subsidizes the interest rate on the loan to the buyer.
Loans can be provided in hryvnia, euros and dollars, both without collateral, and against the collateral of agricultural financial receipts or under classic credit security. Moreover, loan terms vary from 2 to 18 months.
«This loan provides financial support to the farmer during the main agricultural cycle — he can buy fertilizers in the low season, apply them on time, reap the harvest, wait for the best price for the crop, sell it when it is profitable for him, and repay the loan. In this triangle «Bank — producer — farmer» wins everyone. For the bank it is an opportunity to offer the market new interesting tools, while the farmer gets the opportunity to untie two events: the sale of crops and the purchase of fertilizers, buying them in the low season, when the price is much lower,» noted Yevhen Khurylenko, head of the Ostchem Retail.
According to him, the growth rate of the market for targeted loans for the purchase of mineral fertilizers is almost twice as high as in general loans for the agro-industrial complex.
“We have actually changed the paradigm of sales of mineral fertilizers in the agricultural market. This has yielded results — for the first year of operation, our sales exceeded UAH 1 billion,” he said.
Ostchem Retail works directly with the end consumer. For the first time, small and medium-sized farmers with cultivated areas from 200 to 15,000 hectares have direct access to the products of manufacturing plants and access to cheap financing.