The secondary guarantee component for Current Assets

1. The secondary guarantee component for the rotary means of livestock breeding envisages the Agency’s secondary guarantee of the rotary means allocated by the financial institutions for the livestock breeding.
2. The secondary warranty (collateral) of not more than 50% of the total volume of the principal amount of each new loan (non-refinanced / unstructured) issued under the component will be secured by the Agency within the next 18 months after the issuance of the loan or its first tranche if the primary collateral of the loan is the property subjected to the business wholly or partially financed with the loan. Secondary collateral will be provided to the financial institutions only if due to the failure of the borrower to fulfill his/her obligations, the financial institution sells the initial collateral and as a result does not receive 100% of the remaining principal amount; in this case the Agency will pay the difference by up to 50% of the remaining principal amount available before sale of the initial collateral, but not more than 150 000 GEL.  
3. The secondary collateral shall be issued only after the beneficiary submits an audit report to confirm the purposeful spending of the loan.
4. The following persons may use preferential agro-credit within the component:

a) Georgian citizen natural person;

b) Individual entrepreneur registered in compliance with the legislation;

c) Entrepreneur legal entity (except for the state/municipal enterprise) registered in compliance with the legislation.

      5. In order for a potential beneficiary to enjoy a preferential agro-credit, he/she must meet the preconditions for the issuance of such loans by the financial institution and the requirements of the present project:

a) The potential beneficiary must be registered in the register produced within the framework of the “Farms / Farmers Registration Project”.

b) The farm and/or land, where the implementation of the mentioned targeted activities is planned to be implemented, must be in the ownership, co-ownership or use of the borrower, according to the legislation of Georgia (in case of co-ownership, there should be co-owners’ consent on cession of the property during the loan term, while in the event of the use its period of validity should not be less than the loan period).

     6. The loan is issued under the component for the following purposes:

A) To finance the following types of rotary means for livestock breeding:

A.a) Purchase of non-breeding and growing cattle (both by import and locally);

A.b) Financing the current costs of cattle feed;

A.c) Financing the current costs of livestock veterinary drugs;

A.d) Financing the labor resources and veterinary services.