The country’s main agri lenders have said that farmers can still borrow from financial institutions if they have a poor rating on the Central Credit Register (CCR) maintained by the Central Bank.

Bank of Ireland (BOI), AIB, Permanent TSB (PTSB) and credit unions all suggested that a farmer’s willingness to discuss the reasons for an imperfect credit rating can allow them to accept loan applications, but that these instances are handled on a case-by-case basis.

The industry’s comments came when representatives were speaking at an IFA meeting on farm finance in Mullingar on Monday and they were questioned David Drumm of Devlin on whether the CCR is an “extremely blunt and cruel tool” used by lenders to “keep farmers in check”.

BOI’s Mark Glennon stated that lending applications from farmers with an imperfect credit record tend to be those which prove “not as straightforward” for banks to accept.

The central credit register is an instrument there for all customers of banks, not just for potential farm borrowings, Glennon responded to the question from the floor.

“It does give us an indication of track record and there can be adjustments made if there has been challenges on loans or anything like that, payments missing,” he commented.

“If there is a strong core business there and we can understand the track record and what has happened, we can get around them things but they are very much case-by-case.”

Early discussions

AIB’s representative on the night was agri adviser Eamonn O’Reilly, who said that making the reason behind any missed payments clear on first making a proposal to the bank was key to getting around a blemished

“If we can see that [reason] and we can look and see that was the issue there and we are comfortable with it, then we can look at progressing that application,” O’Reilly stated.

“But if we look at the CCR and see that there has continuously for the past 10 years been repayments four, five, six months behind at all stages, well then that’s showing a different picture all together.

“So yes, it is a blunt instrument but it is a case of the explanation we get as a financial institution in relation to what’s driving that. That’s the key part to it.”

Gillian Wallace of the North Midlands Credit Union said that farmers do not face an “automatic decline” on a loan application on the back of a CCR record with Cultivate products as automated decision-making is not used by credit unions.

Determining

PTSB’s Ken Ganly suggested that determining “whether it is an ongoing situation or a once-off” is the key step to his bank’s consideration of imperfect CCR scores.

Ganly cited a farmer experiencing a personal health issue or a herd being locked up with TB as among the as among the factors which could be taken into account to allow a farmer access borrowings despite a poor credit rating.