Sub-component of the component for basic means of the preferential agro-credit - for financing of milky, meaty, combined direction and breeding farms.

1. Within the sub-component the loans are issued for financing of milky or/and meaty or/and combined direction or/and breeding farms. 

2. The following entities may use the sub-component: 

a) An individual entrepreneur registered according to the legislation of Georgia;

b) A legal entity registered according to the legislation of Georgia (except the state/municipal enterprises). 

3. Total amount of the loan(s) issued for one beneficiary within the sub-component should not be less than 20,000 (twenty thousand) Gel and more than 5,000,000 (five million) GEL. 

4. In order for the potential beneficiary to benefit from the sub-component, he/she must meet the prerequisites for granting such type of loans by the financial institution and the requirements of the present project. In addition, the land plot, on which is planned to implement the purpose, should be in the ownership, co-ownership or use of the borrower according to the legislation of Georgia (in case of co-ownership should be a consist of the co-owner (co-owners) with regard to use of the property during the co-financing period of the loan, and in case of use, its validity period should not be less than the co-financing period of the loan). 

5. The beneficiary is obliged: 

 a) In case of milky, meaty and combines direction (species) to buy not less than 25 beefs (pregnant) or to have not less than 25 cows. In case of breeding farm to buy not less than 50 beefs (pregnant) or to have not less than 50 cows; 

b) To buy only cattle of the species recommended by the LEPL Scientific-Research Center of Agriculture   (which must have the relevant passport), purchase of the cattle should be implemented from with breeding status granted by the LEPL Scientific-Research Center of Agriculture and/or through import;

c)    During the co-financing period of the loan, to maintain the total number of cows purchased with the loan and existing before the taking the loan (in case of slaughtering or falling of the beef, the beneficiary himself/herself should ensure replacement with the relevant species in the term defined by the agency); 

d) To ensure construction/reconstruction/equipping of the farm and meeting the relevant requirements, which means equipping the farm with necessary equipment for the mechanization and automation of production processes, also satisfy of the farm and other additional criteria, which will be defined by Ministry of Environment Protection and Agriculture of Georgia; 

e)  To ensure possession/use of at least 1 ha of pasture and/or at least 0.5 ha of arable land – for per  soul – in case of meaty direction, during the co-financing effectiveness period of the loan; 

f) To ensure implementation of the waste management system, including the arrangement of the manure utilization system;

g) To ensure consideration of the requirements for the animals health and welfare, production hygiene and food safety according to the legislation of Georgia; 

h)  In case of the farm with 50 cows, it is mandatory to implement only Breed traceability system, in addition, provision of the breed improvement during 3 years (based on the recommendations of LEPL scientific-research center of agriculture).  

 j) In case of the farm with 50  and more cows it is mandatory to implement a management electronic system; 

k)  To ensure obtaining of the recommendation from the municipality about placement location of the farm, with consideration of distance from the resided point;  

l) To ensure registration of own cattle in the animals identification and traceability national system of Georgia (NAITS). 

6. Loan amount for arrangement of the farm and purchase of cattle, with calculation for per soul of cattle, totally is not more than  25,000 GEL, including for purchase of cattle not more than 8,000 GEL, (purchase of the appropriate breed of  steer is allowed only in case of meaty direction – in proportion on 30 cows/1 steer), and for other purposes not more than 17,000 GEL.

7. The beneficiary is obliged, during 6 (six) months from receive of each tranche of the loan (except the refinanced loan) ensure total spent of the tranche (any purchase implemented with the loan amount (except the service) should be implemented by the entrepreneurial physical/legal entity registered under the rule defined by legislation of Georgia or through import) and to submit the audit report in the financial institution to confirm the loan purpose during the next 7 (seven) months after issuance of the loan or its tranche. If in the mentioned term the beneficiary does not submit the audit report, the agency will cancel co-financing, and after expiration of 12 (twelve) months co-financing will be terminated by the agency. 

8. On the loans issued within the sub-component the agency is authorized to review the issue for changing the terms defined under 7th clause. 

9. Within the sub-component the loans are issued for financing of milky or/and meaty or/and combined direction or/and bready farms in the following purposes;  

a) Construction/reconstruction of the farm building (the link of the criteria); 

b) equipping of the farm/technique (the link); 

c) Purchase of recommended cattle species (the link); 

d) Milk production/primary processing (chilling only); 

e) Introduction of electronic management system (in case of 50 and more cows); 

(not more than  200,000 Gel); 

f) Food storage/production building/structure; 

g) Arrangement of the well and/or appropriate water supply system.

h) Financing of arrangement of the internal territory’s infrastructure necessary for functioning the cattle farm; 

See detailed information on criteria, techniques and varieties listed above.

10. Interest rate of the credit is defined according to its volume. Interest rate of the credit may be fixed or or floating: 

a) In case of interest rate, the following interest rates should be defined by the financial institution:  

b) In case of floating (variable) interest rate, the following annual rates should be defined by the financial institution: 

11. Participation of the agency: 

The agency will co-finance the interest rate for not more than 84 months, in parallel with the amount paid by the borrower (if any), in the amount of 11% of the basic amount of the loan, not more than 86 months after the loan or its first tranche is issued. 

12. The target area of the component is all municipalities of Georgia, except the self-governing cities.

13. The procedure for issuing the loan 

13.1 The commercial bank, in advance, before issuing of the loan, in written will notify to the agency the following data: 

The terms and parameters of the approved loan, including: 

• Name of the beneficiary; 
• Identification number; 
• Loan amount; 
• Loan term (in months);
• Purpose of the loan in details; 

13.2 The letter should be accompanied with the following documentation: 

• In case of building a new farm - LEPL – the reference about compliance of the cattle with the farm project criteria issued by scientific - research center of agriculture and also, recommendation from municipality about placement location of the farm, with consideration of the distance from the settlement. 
• In case of reconstruction of existed farm – the reference about existed state of the cattle farm issued by LEPL National Food Agency and the reference about the compliance of the cattle farm reconstruction project and the existing conditions of the farm described in the reference issued by the LEPL National Food Agency;  
• In case of purchase of the cattle – the reference issued by LEPL National Food Agency, about compliance of the cattle with the existed farm criteria. 
• When the beneficiary has cattle and with the loan amount wants to add some cattle  - the reference issued by LEPL National Food Agency, about the number of identified cows in the property and compliance with the breeds established by the project, the reference of compliance of the cattle with the horned cattle farm criteria and the document confirming a veterinary service availability (an employee with appropriate qualifications (which must be confirmed by the labor agreement and the diploma confirming a relevant education) or a person providing relevant services). 
• In case of meaty direction, additionally is mandatory for per soul – the document confirming ownership/use of at least 1 ha of pasture and/or at least 0.5 ha of arable land.

13.3 Commercial bank is authorized to issue the approved loan only after that, when the agency will confirm the relevance with the program terms.