Small and medium-sized enterprises can apply for loans of up to US$ 250,000 or the equivalent of this sum in euros or Moldovan lei within the second component “Agribusiness Support” of the Rural Resilience Project IFAD VII, as from 2018.

Elena Burlacu, lending specialist of the IFAD Consolidated Programs Implementation Unit in Moldova, told a news conference that the loans will be granted for a period of up to eight months with a grace period of four years, IPN reports. A new element is that the circulating capital afferent to investments will be financed in the amount of 20% of the requested loan.

Young entrepreneurs will be able to get financing for agricultural or non-agricultural activities if these are developed in rural areas. The financing will be of at most 700,000 lei and will be intended especially for setting up multiannual plantations. As in the case of SMEs, the circulating capital afferent to the investments made by young entrepreneurs will be financed in the amount of 20% of the requested loan.

For members of savings and loan associations, the project will provide loans of up to 150,000 lei repayable in at most five years. Any activity performed in rural areas will be financed.

The second component of IFAD VII Project envisions the creation of a loan guarantee fund that will support entrepreneurs, especially those who do not have security to take out loans from banks. Grants of US$ 25,000 will be offered for creating production processing units, including to groups of producers so as to stimulate the constitution of such groups.

Financing will be also granted for training activities, presentation of new advanced agricultural technologies and practices. The financing will be distributed through banks or other lending institutions that will be chosen at a contest.

IFAD offers Moldova US$ 23.7 million in financing for implementing the Rural Resilience Project IFAD VII. Of this sum, US$ 5.5 million is provided in the form of a grant, while over US$ 18 as a loan for developing agricultural producers’ capacities and helping them adjust their production systems to climate change. The loan is repayable in 25 years, at an interest rate of 1.25%, plus a commission of over 2%.

The interest rate paid by the recipients of loans will be set by the banking or nonbanking institution through which the loan will be raised. The interest rate within the IFAD projects under implementation is 10.4% on average.