What should be considered when using credit?


    This week I will try to share with you some information about the use of agricultural credit, which is very important for many people.

    Private banks have some goals for lending. These goals sometimes start to become such that the business begins to get out of hand.

    Bank personnel dealing with agricultural banking start to visit agricultural NGOs and villages with the pressure of the bank branch manager. He tells and he tells. They say we can solve your cash problem with the most favorable interest rates.

    Actually, the villagers’ TR identity number and the newly dated ÇKS (Farmer Registration System) document are important for them. No need to be angry with that bank staff. Because they are under constant pressure.

    They learn the KKB (Credit Registration Bureau) note, known as the debt payment score, with the Turkish ID number. Thus, they learn how much the manufacturer owes, does he have enforcement proceedings, whether he has a loaded surety. Afterwards, they make a limit allocation for that producer by looking at the ÇKS document.

    Here are the most important points that our manufacturer will pay attention to. I’m not saying the producer doesn’t need money. Of course there is. However, the manufacturer himself knows very well how much credit he has to use, rather than that FRS certificate.

    For example, if the producer is planting 20 decares of vegetables, he knows that the cost of this plantation itself will be 35,000 TL including the field rent, and the money to be received in the harvest will amount to approximately 50,000 TL. If the prices go well in the season, this figure makes a 10% difference. The loan to be used by our producer should not exceed 35,000 TL if it does not have equity. This is where mistakes start.

    The producer receives 35.000 TL from at least three banks with the FRS certificate. He starts to raise his living standards with the money he used in loans of approximately 105,000 TL. House, car, jewelery etc. etc. He thinks that the money he receives during the harvest is his own and starts to spend it on other matters.

    When it’s time to pay, the situations I mentioned last week start to arise. The producer should really use credit according to the means at his disposal. He should negotiate with the bank on the interest rate. It should definitely consult someone who knows about investment. But this should not be the banker.

    Because bankers have goals. These goals must necessarily be achieved. It may not share the right information to attach. The banker first tells about what the producer wanted to hear. After the signatures are made, it is long overdue.

    Producers should definitely follow the incentives and supports provided by the state. Agricultural Directorates always provide the necessary support to the producers in these matters. While the Ziraat bank extends loans at an annual rate of 4%, private banks extend loans in the range of 12-15% annually.

    Attention. The state subsidizes the interest to be paid by the producer by approximately 60% through the agricultural bank. I do not know if the producers read this article, but let those who do read and explain it to those who do not.

    Next week, I will continue to examine these issues with various examples. Good weeks. However, keep in mind that these agricultural loans will put people in a difficult situation from time to time.


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