Central Bank of Cuba Announces New Measures for Farm Loans

The Central Bank of Cuba (BCC) announced a new set of measures for credits and financing to farmers, to begin immediately. The measures come into force because of the problems that emerged and the government’s need to resolve the matter.

Francisco Mayobre Lence, first vice-president of the BCC, said that the implementing of the Ordering Task, increased expenses and, subsequently, a demand for higher financing had necessitated the changes.

The issues that arose led to insufficient backing guarantees and generated nonconformity. In view of the situation, they sought alternatives. Cuba’s Central Bank responded with a series of new measures to deal with the emerging problems.

Loans will now be granted based on risk analysis. Production in which the expenses are greater than profits will not be financed, he said.

It was also decided that the Development Fund established in 2016 which provided financing for the main agriculture production of Cuba, will now be available for tomato, pork, soybeans and livestock production.

Those who begin farming will continue to receive benefits in financing for the first two years, he stated.

The banks will assume more risk with the financing granted. If a producer maintains an excellent credit history, a guarantee will not be required.

Customers who have served in the military will not be required to present guarantees. Cooperatives can create funds for the credits to their members. Individual producers can establish funds to be used to back up the financing.

Vice President Mayobre said that farmers will need to have a bank account for banking and services, which permits greater control for granting credits, and mobile banking services.

Ideal conditions for electronic banking are not available to serve the 400,000 farmers across the Island and need to in place to facilitate the process.

The Development Bank will provide state resources for long-term financing. It will receive funds from the budget for production considered to be a priority, he added.

Mayobre said that in 2011 the credit policy for citizens, self-employed and small farmers was updated. Rules for granting credits were set up and granted based on future income.

By 2016 the Development Fund included budgetary resources for the production of various crops, cattle, bovine and poultry farming, with low interest rates.

These initiatives have been successful. Last year, financing for agricultural activity represented 31 percent of the credits granted to the bank, Mayobre said.