Financial Support

Russian Agricultural Bank assists the Russian Government in implementing federal policy in agribusiness.

RusAg plays a fundamental role in financing domestic agribusiness development. The Bank’s mission and strategy underline financing and fostering the development of agribusiness (including fishery and forestry enterprises), and the populations of small towns and rural areas as its core goals.

The Bank plays a major role in implementing federal and regional agribusiness development programs. RusAg has cooperation agreements in place to implement state programs and support agribusiness with the administrations of Russia’s republics and regions.

Russian Agricultural Bank takes part in sustainability programs focused on the social aspects and initiated by the Government. The aims of these programs are to provide affordable financing to companies in agribusiness, to improve their financial performance so that more rural population may benefit from them.

Financing Grain Purchases and Commodity Interventions

Since 2005, in accordance with a Government resolution, Russian Agricultural Bank has served as the State agent and has provided financial resources for grain market purchasing interventions.

Ensuring the Repayment of Outstanding Loans

Since 2002, Russian Agricultural Bank has acted as a State agent for recovering loans from legal entities, constituent entities, and municipalities in favor of the Russian Federation.

In 2015, the Bank maintained analytical records on 85 liabilities in the amount of RUB 0.9 billion and also took required measures to settle the debts of 473 borrowers, with an outstanding principal of RUB 1.5 billion who do not have official liability towards the Russian Ministry of Finance.

The Bank submitted five claims to institute enforcement proceedings and to seize the borrower’s property. The Bank interacted with bailiff services to control 42 enforcement proceedings against borrowers.

In total, the Bank enforced the recovery of RUB 7.3 billion to the federal budget during the 2002-2015 period.

Financial Rehabilitation of Agribusiness Enterprises

Since 2002, Russian Agricultural Bank has implemented governmental policy on the financial rehabilitation of agricultural producers.

The program, on the one hand, ensures the repayment of outstanding debts to the federal budget and other creditors, and, on the other hand, it substantially alleviates the financial constraints facing agribusiness enterprises, helps maintain social and economic infrastructure, and increases the employment level in rural areas.

Rural Areas Development

Russian Agricultural Bank acts as the Government agent in the implementation of the Program by supporting the housing construction projects in rural areas. This program also involves lending to individuals residing in small towns and rural areas who are involved in agricultural production.

Contribution to the Development of Priority Production Industries

Pursuant to the Agreement with the Deposit Insurance Agency concluded in late 2015 as part of the capital replenishment program, the Bank has committed to increase monthly lending to priority industries by 1% (namely, agribusiness, processing industries (including foodstuffs), machine building (aircraft, shipbuilding, and the automotive sector, etc.), chemical production, real estate development, transportation, communications, electricity, gas, and water generation and distribution).

Russian Agricultural Bank is contemplating several major lending directions within the framework of the Agribusiness support programs.

  • Seasonal Field Works Financing: Russian Agricultural Bank holds a 66% share in financing of seasonal field works. Since 2013, the Bank issued over RUB 637 billion in loans for this purpose.
  • Lending for Agricultural Equipment and Machinery Purchases: Russian Agricultural Bank provides lending for the implementation of the Government policy on agricultural equipment upgrades, machinery is pledged as collateral for such loans and insured in favor of the Bank. In 2015, for these purposes, the Bank extended RUB 13.2 billion.
  • Financing Investment Projects for Constructing and Modernizing Livestock Facilities: during the 2006-2015 period, Russian Agricultural Bank provided financial resources to enterprises and farmers that allowed for the realization of 4,879 investment projects to construct and modernize livestock (including poultry) facilities and other agribusiness projects, in the total amount of RUB 457.4 billion. In 2015, within this segment, the Bank extended RUB 43.8 billion.
  • Financing the Purchase of Farm Animals: for this purpose, in 2015, Russian Agricultural Bank issued RUB 1.9 billion in loans.
  • Lending to Agricultural Credit and Consumer Cooperatives: Russian Agricultural Bank assists credit and consumer cooperatives development as an important part of rural areas economic and financial stabilization. The Bank provides loans to agricultural consumer and credit cooperatives, as well as information support, including legal and financial consulting services, through its network of regional branches and additional offices.

Subsidized Lending

Russian Agricultural Bank is a key participant in federal and regional programs under which agricultural producers receive compensation in the form of a subsidy from federal and/or regional budgets for a portion of their interest costs.

For a borrower to receive the compensation from the relevant budget, a loan must be granted for the purchase of agricultural machinery or equipment, seeds, fodder, livestock or other similar purposes. The borrower could receive a subsidy in the next period, only if he makes timely loan payments in the previous periods.

Borrowers are eligible for the following interest subsidies:

On short-term loans (up to 1 year), starting 01.01.2016:

  • from federal budget – 2/3 of the refinancing rate, for the development of dairy production – 80% of the refinancing rate, for the priority agribusiness subsectors – 100%;
  • from regional budgets – up to 1/3 of the refinancing rate, for the development of dairy production and priority agribusiness subsectors – up to 3 p.p. over the refinancing rate, but not less than 5% of funds provided to the borrower for the reimbursement of expenses.

On investment loans, starting 01.01.2016 :

  • from federal budget – 2/3 of the refinancing rate, for the development of dairy production and priority agribusiness subsectors – 100% of the refinancing rate;
  • from regional budgets – up to 1/3 of the refinancing rate, for the development of dairy production and priority agribusiness subsectors – up to 3 p.p. over the refinancing rate, but not less than 5% of funds provided to the borrower for the reimbursement of expenses.

Subsidy calculation is based on the Bank of Russia’s refinancing rate.

Depending on the purpose of the loan and the category of the borrower, loans subject to subsidies may have maturities of up to ten years. Subsidized loans require punctual payments from borrowers, thus ensuring their high performance.