The Lithuanian Rural Credit Guarantee Fund launches new guarantee facility for leasing companies

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On 1st January 2012, the new amendment of the statutes of the Lithuanian Rural Credit Guarantee Fund (Garfondas) came into force, allowing it to start a new facility – providing guarantees, not only for banks and credit unions, but also for leasing companies.

In order to promote the agricultural and rural development and the diversity of funding sources, the Ministry of Agriculture, following the order No.3D-950 of 28 December 2011 has amended the Regulation for the Rural Credit Guarantee Fund‘s activity, enabling it from now on to provide guarantees to leasing companies for the acquisitions of their customers.

„Last year there was a strong interest of the leasing companies in the state of guarantees provided by the Fund“ – says the director of Rural Credit Guarantee Fund Danguole Cukauskiene. „Leasing companies are active in the funding the rural sector enterprices, farmers, that‘s why the funding opportunity was given to the leasing companies, as well as to the credit institutions, to get the Guarantee Fund‘s guarantees.

The main conditions of the guarantees issuing for the leasing companies:

• The purpose of leasing – new and unused agricultural agricultural and forestry machinery, industrial equipments and facilities

• Guarantee percentage – up to 30 percent the outstanding price for the new equipment set in the leasing agreement

• The maximum leasing amount – 1 mill. LTL

• Leasing term – not less than 3 years

• Clients – farmer‘s farms and the other agricultural companies, cooperatives and agricultural processing companies

Guarantees for leasing companies for equipment acquired by their customers will be provided once the leasing companies and the Guarantee Fund sign the Cooperation Agreements for the guarantee issuing. The procedures for issuing guarantees will be the same as for credit institutions.

(source: Rural Credit Guarantee Fund web-site)