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Finance Ireland to increase borrowing limits for dairy farmers on innovative Milkflex product by 66% to €500,000.
Agribusiness All Beef Co-op Corporate Dairy
Non-bank lender has extended over €300 million to Irish Dairy Farmers to date. Innovative product links loan repayments to prevailing price of Milk.
Finance Ireland, Ireland’s largest non-bank lender, is to raise the borrowing limit for its innovative Milkflex product by 66% - to €500,000 from €300,000.
Milkflex loans are unsecured. The loans are designed to link repayments to milk prices. Repayment schedules are reduced or even paused following reductions in milk prices while a sustained increase will see a temporary rise in repayments.
The Milkflex product was launched by Finance Ireland in 2016 in conjunction with Glanbia. The product has since been rolled out to Dairy Farmers around the country in partnership with 19 co-ops nationwide. To date, Finance Ireland has lent over €300 million to farmers under the scheme. While farmers can avail of Milkflex loans for a variety of purposes (except land purchase), the majority of recent lending has been for investment in sustainability initiatives.
Finance Ireland is also changing the interest rate to be charged on the loans. For new applications, the rate will be 1-month Euribor plus 4.50% - having previously been 1-month Euribor plus 3.75%. For loans approved but not yet drawn down, loans must be drawn by 15th November to avail of the old rate.
These changes do not impact existing Milkflex loans.
Speaking today Conor Boyle, Managing Director of Finance Ireland Agri said: “The demand for Milkflex loans from Irish dairy farmers continues to exceed our expectations and we are delighted to be able to make these improvements which will enable us to provide even greater support to more dairy farmers across the country.”
Volatility Trigger Prices
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Existing Definition |
Definition to apply from the 15th November 2023 |
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Volatility Trigger price 1 (50% reduction in loan repayments for 6x months) |
Applies when milk price falls to 28cpl or less for three consecutive months |
Applies when milk price falls to 33cpl or less for three consecutive months |
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Volatility Trigger price 2 (100% reduction in loan repayments for 6x months) |
Applies when milk price falls to 26cpl or less for three consecutive months |
Applies when milk price falls to 31cpl or less for three consecutive months |
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Volatility Trigger price 3 (Loan repayments increase by 25% for 6x months) |
Applies when milk price increases to34cpl or more for three consecutive months |
Applies when milk price increases to 41cpl or more for three consecutive months |
First Published 20 September 2023