Georgia’s Preferential Agrocredit Program will not be abolished, but the rules for receiving state-subsidized agricultural loans are changing. According to the Ministry of Environmental Protection and Agriculture, the program will continue under the new State Agro Co-financing Program, launching on July 1.
Under the current system, banks independently issue preferential agroloans, while the Rural Development Agency does not participate in loan approval. Under the new model, however, applicants must first submit a business plan to the government for approval before approaching a bank for financing. The process will include registration in the farmers’ registry, submission of an application, a business plan, and supporting documents.
The loan subsidy conditions are also changing. Previously, the state subsidized 11% of the loan interest for 48 months; under the new model, this will be reduced to 8% for 36 months. In addition, the state’s participation in one project will cover up to 50% of the investment, with a maximum contribution of 2 million GEL, including interest subsidies.
The ministry says the new approach is intended to create a more coordinated agricultural financing system. If a bank refuses to finance a project approved by the government, beneficiaries will still be able to apply to other banks or change their financing structure. Over the past 13 years, commercial banks have issued nearly GEL 8 billion in agricultural loans under the program, while the state spent GEL 1.8 billion on interest subsidies.
