Bank financing and investments in Agriculture and Agribusiness

The stable development of agricultural enterprises guarantees food security, creates a source of budget revenues and increases the potential for the development of rural areas and local communities. In current realities, agriculture remains one of the most important sectors of the global economy. Financing and investments in Agriculture and Agribusiness currently involves the use of a wide range of sources, mechanisms and tools for the formation of financial resources.

The teams of rational structure of agriculture and agribusiness financing is a multifaceted process that depends on many factors, including the rhythm of inflows of funds in a certain period of time, directions of enterprise development, financial health, market structure, and investment prospects.

However, a dynamic and highly competitive globalized economy requires rapid response of agribusiness to environmental changes, so internal financial sources are often insufficient to ensure effective current activities and investments. Due to its high sensitivity to the influence of various negative factors, agriculture also needs certain state support.

Nevertheless, the practice of leading agricultural enterprises proves the need for bank lending, including long-term loans for financing large, expensive projects. External debt financing (long-term investment loans, leasing instruments, project finance mechanisms), as well as government subsidies, are important factors in the successful development of agriculture.

Viola Funding Limited offers financing and investments of agriculture and agribusiness projects anywhere in the world.

Bank financing and investments of agriculture and agribusiness

Agricultural enterprises are increasingly in need of attracting long-term financial resources for the modernization of equipment, the construction of new facilities, and the introduction of innovative technologies. The development and prosperity of agribusiness is impossible without attracting credit resources, since agriculture is a capital-intensive industry with a high level of risk.

To improve the long-term loans of agriculture projects in a highly competitive environment, it is necessary to create an adequate financial infrastructure aimed at large-scale agricultural lending. The financial infrastructure should include not only commercial banks, but also credit unions, credit cooperatives and other institutions operating with the financial support of the state and/or supranational bodies. In the countries of the European Union and beyond, there are many successful examples of building such a financing system that contributes to the stable development of agribusiness.

The problem of insufficient access to bank financing is particularly characteristic of small and medium-sized businesses. According to international financial organizations, about 80-85% of the financial needs of farmers around the world are not met, including due to the lack of adequate conditions for debt financing. The needs of small farms now exceed $200 billion, while financial institutions invest a little more than $30 billion in their development. Finding and attracting a bank loan for a large-scale agricultural project today is quite a difficult task that should be entrusted to a professional financial team.

Long-term investment opportunities in agriculture

Today, the global agricultural sector needs huge investments. These should be smart investments that will contribute to the fight against climate change, increase overall efficiency of agricultural production and promote new products. It is difficult to overstate the importance of financing innovation in agriculture, which remains extremely sensitive to adverse environmental factors such as drought.

Experts emphasize the importance of financing projects, which are based on the latest technologies and principles of climate neutrality. Agriculture on the current scale is a huge contributor to global warming, and negative climate change is beginning to affect the efficiency of agriculture.

The financing of the production of agricultural raw materials (rice, wheat, palm oil, coffee, fruits, vegetables, cocoa) provides work for a number of processing industries. But innovative projects in this area are very expensive and require long-term flexible financing.

Our company Viola funding Limited has united leading investment and financial experts who work side by side with the customer at all stages of the investment project in order to achieve the optimal result. VFL enjoys the support of well-certified private investors, cooperating with international investment funds and major financial institutions in Europe and beyond.

We provide the following services for large businesses:

• Investment crediting of agricultural projects. • Financial engineering and modeling services.
• Project finance for capital-intensive initiatives. • Letters of credit and bank guarantees. • Refinancing for agribusiness and many more.