Agriculture Development Support Programme - purchase of agricultural products

 

1. Programme Objective

 

The goal of the programme is to further support trade companies, hotels, hospitality facilities and other companies which purchase products from domestic agricultural producers.

This programme shall support higher purchases of agricultural products which shall contribute to further incentives for domestic agricultural producers to take up agriculture.

2.      Loan Purpose 

The loans are intended for the purchase of domestic agricultural products.

3.      Loan Beneficiaries 

Loan beneficiaries under this credit line are: 

·         Trade companies, hotels, hospitality facilities and other companies which purchase agricultural products from domestic producers.

4.      Lending Method 

IDF MN JSC implements this Programme through direct lending to the loan beneficiaries. 

Loan Applications that are not supported with mandatory defined documents shall not be taken into consideration. 

This programme is implemented in cooperation with the Ministry of Agriculture and Rural Development.

5.      Loan Conditions 

5.a) Lending conditions: 

·         Maximum amount up to €1.000.000,00;

·         Interest rate of 2,50% annually with the proportional interest calculation method;

·         Repayment period up to 12 months (including a grace period of up to 2 months);

·         Repayment of loans on a monthly and quarterly basis. 

Special conditions: 

  • For subjects implementing projects in northern municipalities of Montenegro and in municipalities below the average value of the development index in Montenegro, the interest rate amounts to 2,00% on an annual level with proportional interest calculation method. 

5.b) Terms of lending for the purchase of market lamb surpluses: 

• Maximum amount up to 1.000.000,00 EUR;

• The interest rate is 2.50% annually with a proportional interest calculation system;

• Repayment period up to 12 months (including up to 2 months grace period);

• Repayment of loans on a monthly and quarterly basis.

6.      Fees 

Direct loan arrangements shall be subject to the following fee: 

  • 0,30% on the approved amount for subjects implementing projects in northern municipalities of Montenegro and in municipalities below the average value of the development index in Montenegro;
  • 0,50% on the amount approved for projects implemented in other municipalities. 

In addition, IDF MNE JSC will not charge a fee for loans intended to finance the purchase of liver market surpluses.

7.      Utilization of Loan 

Loan utilization period is up to 2 months.

Final utilization period shall be established on the case-by-case basis for each individual loan arrangement dependent on the real needs and the dynamics of investing.

Loan beneficiaries shall be obliged to a dedicated usage of loan funds in accordance with this programme and agreement signed between IDF MN JSC and loan beneficiary.

For users of credit support for the purchase of market surpluses of lambs, according to this program, part of the loan funds can be used to settle the obligations of the loan user IDF MNE JSC from previous years. 

IDF MN JSC shall perform control of the dedicated usage of loan funds on the basis of delivered purchase blocks, pro-forma invoices, invoices and proof of payment thereof, except for loans intended to finance the purchase of market surpluses of lambs.

 The transfer of funds shall be made to the account of the borrower / supplier who sells agricultural products.

 

8.      Means of Security 

As means of loan security IDF MN JSC shall accept bills of exchange, but also mortgages on real estate if applicable, bank guarantees, local government units' guarantees, guarantees of the Government of Montenegro, guarantees of credit rating legal entities, stocks of receivables, administrative bans on income, at least one solvent guarantor (depending on the amount of the loan and the guarantor's income), premiums, subsidies, grants and direct payments ensured by the Ministry of Agriculture and Rural Development.

Since this is a short-term loan, nothing more than a bill of exchange as means of security may not be necessary.[1]

9.      Required Documents

 

Documents required for realization of the project through direct loan arrangement:

·         Loan Application;

·         Excerpt from the Central Registry of Business Entities - not older than 30 days;

·         Certificate on VAT registration, if the end user is subject to the VAT;

·         Valid Statute of the Company;

·         Authorization for retrieving data from the Regulatory Loan Registry of the Central Bank of Montenegro (RKR), including founders and related parties[2];

·         Projections for the repayment period;

  • Valid form of certified signatures of persons authorised for representation (OP) and valid specimen signature card;

·         Tax Administration certificate on settled taxes and contributions – not older than 30 days;

·         A set of annual financial statements (Balance Sheet, Income Statement, annual account balance (Trial balance), analytical breakdown of buyers and suppliers) – for the past two years, as well as the interim aforementioned reports for the current year, exception being the clients that are not subject to mandatory compilation of financial statements;

·         Audit report for loan beneficiaries that are subject to statutory audits under the law;

·         Official form for reporting on settlement of monthly taxes and social contributions for employees, verified by the Tax Directorate as evidence of the number of employees;

·         Proposal of the collateral;

In addition, IDF MNE JSC can require additional documentation:

·         Certificate of registration of the agricultural producers from whom the products are bought (Ministry of Agriculture and Rural Development);

·         Purchase coupons, pro-forma invoices, invoices;

  • All documents, as a general rule, shall be submitted in Montenegrin language.

10.  Other Provisions 

Additional rules applicable to this Loan Programme, which are not mentioned in this document, are defined in special acts passed by competent bodies of IDF MN JSC.

11.  Credit Line Validity 

This Credit Line shall be valid until 31 December 2019, until it’s altered or terminated. 

President of the Board of Directors of IDF MN JSC 

         PhD Zoran Vukčević




[1] Provided that the criteria defined by the internal acts of the IDF are met.

[2] Article 3, point 8 of the Law on Banks - (Official Gazette of Montenegro 17/08 of 11 March 2008, 44/10 of 30 July 2010, 40/11 of 8 August 2011)

LENDING

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