Farmers can now access micro loans of up to $150,000 to prepare land or purchase equipment and supplies.

JN Small Business Loans Limited (JNSBL) unveiled the new loan product, branded Famer’s Choice, at the Denbigh Agricultural and Industrial Show at the Clarendon-based showground yesterday. JNSBL general manager Frank Whylie said the product is intended to meet the financial needs of micro farmers across the island.

“Access to affordable credit has been a longstanding problem for our farmers, who often do not have the collateral required to secure the loans,” said Whylie. “This product will provide another source for them to access funds at reasonable rates,” he added.

Jamaica has some 180,000 small farmers that make up about 79 percent of members in the agricultural sector, according to the Ministry of Agriculture and Fisheries. However, many of them continually find it difficult to access credit.

Whylie said the JNSBL agricultural loan will complement existing products established by government and the private sector to increase farmers’ access to financing.

Last year, the government, through the Development Bank of Jamaica, provided a special credit line for viable agricultural projects. The funds were disbursed through the People’s Co-operative Banks and other Approved Financial Institutions (AFI) at 13 percent per annum according to the Economic and Social Survey by the Planning Institute of Jamaica (PIOJ).

“What we have done is to re-design the loan facility to meet the needs of small farmers, whose production make a significant contribution to national production levels,” Whylie disclosed.

“To stimulate agricultural growth we have to facilitate the ‘base of the economic pyramid’ so that farmers can achieve the right formula to sustain their production cycles. We expect that this pool of accessible credit will increase and help to sustain the growth now being experienced by the sector,” Whylie posited. Real value added growth for Agriculture, Forestry and Fishing was 12.1 percent in 2009, according to the PIOJ, contributing 5.6 percent to overall gross domestic product (GDP).

To qualify for the loan, farmers are required to prepare a plan in consultation with the Rural Agricultural Development Authority (RADA). The plans for submission to JNSBL must include start up costs and projected revenues.

Farmers who qualify to borrow from JNSBL have a maximum of up to 25 weeks to repay the loan, Whylie said.

“For loan security we will accept a promissory note; and assignment of the proceeds of sale from buyers participating in the programme,” Whylie disclosed. Furniture and appliances with serial numbers are also accepted collateral, and motor vehicles.

“There are no processing fees, therefore borrowers can be assured that no monies will be deducted from the sums they receive, once the loan has been approved for disbursement,” Whylie said.