The slow pace at which the Agricultural Development Bank operates forces producers to get finance from private institutions, paying higher rates.
Although the Agricultural Development Bank (ADB) has pledged to cut the time it takes for a loan approval, from one and a half years to two months, it has not kept its promise. In 2013, the approval of agricultural loans declined by 22% compared to the previous year.
Prensa.com reports that “the delay has led to producers seeking loans from commercial houses and mill owners where interest rates are higher, which eventually ends up reducing profit margins.”
“It is no use (the BDA) offering interest rates of 2% if private banking is more dynamic and faster with its disbursements,” said Ernesto Ameth, from the Producers Association in Renacimiento, ChiriquÃ.
Source: Prensa.com