The European Investment Bank (EIB) has granted a EUR 200 million loan to Landwirtschaftliche Rentenbank, which will onlend the proceeds to small and medium-sized farming businesses under its agriculture support programme. The two parties signed the loan agreement in Frankfurt today.
EIB Vice-President Wilhelm Molterer called the agreement with Rentenbank an important step in providing targeted support for agricultural firms: “The farming sector and rural areas are also feeling the pressures of competition and the need to innovate. The funds made available today are designed to provide young companies with greater organisational freedom. The long maturities of the individual loans will especially contribute to this.” The EIB has been working for many years with Rentenbank, a renowned expert in SME financing, he said when signing the agreement.
Dr Horst Reinhardt, Speaker of the Board of Managing Directors of Landwirtschaftliche Rentenbank, welcomed the fact that the EIB’s SME financing targeted firms in the farming as well as commercial sectors. “Farming is a pillar of the European economy that should not be underestimated. Germany’s agricultural sector, which is characterised by the large number of smaller businesses, is in the throes of a successful modernisation process. Farmers are investing dynamically and thereby contributing to economic development in rural areas.”
The loan agreement is aimed at supporting firms in the farming, forestry, winegrowing and horticultural but also renewable energy sectors. Companies in the food industry and commercial and service enterprises in the agricultural sector will also be eligible for financing. The lending programme focuses on small and medium-sized enterprises (SMEs – firms with up to 250 employees).
Support for small and medium-sized companies has long been one of the EU bank’s top financing priorities. In the first half of this year alone, the EIB made available EUR 11.7 billion for some 68 000 SMEs and midcaps (firms with up to 3 000 employees). In 2013, total financing by the EIB Group (EIB and European Investment Fund) in support of such firms reached the record amount of around EUR 22 billion, making this the biggest single sector financed. Strengthening the small business economy will continue to be one of the Bank’s key tasks going forward.