There was a “surge in demand” for Culitvate farm loans from credit unions in 2023, with farmers seeking a combined €50m in borrowings.

This represents a doubling in the value of farmer loan applications in just two years and a 22% rise in demand for the Cultivate lending facility in 2023 alone.

The expansion of Cultivate to 53 credit unions has fuelled a 250% increase in the value of loans sought through the offering since 2019 after five years of consecutive growth.

The average loan applied for amounted to over €32,800 loaned out over five and a half years.

May proved to be the busiest month for farmer applications and January was the slowest, which Cultivate stated shows farmers’ preference for completing building works over the summer.

The opening of the Targeted Agricultural Modernisation Scheme III last year drove a 55% jump in farm building loan applications.

Around one quarter of all applications related to farm buildings.

Another 30% of applications fell under the category of stock loans and working capital, while 17% were seeking credit for equipment and 12% for tractor purchases.

Credit unions have marketed Cultivate as providing benefits not offered by other agri-lenders, such as banks.

These include a one-day decision window after all required documentation has been received, loan protection insurance in case the debtor dies and variable interest rates not directly tied to the ECB’s rates.

Cultivate stated that it is currently offering unsecured loans of €50,000 at 6.75% APR, which it claims is a more attractive rate than that offered by either PTSB or AIB.

Funding of up to €75,000 can be sought unsecured from credit unions participating in the Cultivate initiative to be repaid over a period of 10 years, with no penalties applying to the early repayment of borrowings.