AUSTRALIAN Government farm business lender, the Regional Investment Corporation, will lift the variable interest rate on all concessional farm business loans — including AgriStarter, Farm Investment, Drought, and AgBiz Drought — by 47 basis points to 4.99 percent from 1 February 2024.
The RIC Plantation Loan variable interest rate will increase to 4.54pc, the corporation announced today.
RIC chief executive officer John Howard said RIC concessional loans play a vital role in strengthening Australian agriculture and helping farm businesses manage their risk.
“This is the first time in 12 months RIC interest rates have changed. Since RIC’s last rate rise on 1 February 2023, the RBA cash rate has increased by 1.25 per cent,” he said.
“In the context of rising capital costs, and dropping commodity prices in the later part of 2023, it’s reassuring to be able to provide our customers with a concession loan product and some certainty in managing their finances.
“One of the key benefits of RIC loans is interest rates are reviewed every 6 months and are based on the average of the Australian Government 10-year bond rate, not Reserve Bank of Australia (RBA) cash rate movements,” Mr Howard said.
“We are pleased RIC loan interest rates continue to provide a significant concessional benefit to farm businesses in financial need.”
Mr Howard said RIC loans have saved its customers an estimated $268.47 million in interest repayments in since RIC started in July 2018.
“Our latest research shows 4 out of 5 RIC loan customers have greater confidence in the future and profitability of their farm business.
“Increasing agribusiness commercial interest rates, unpredictable weather patterns and volatile markets are driving greater need for our low-interest loans,” he said.
“Application volumes are up 32 per cent in the first half of this financial year, compared with the same period the year prior. For the remaining six months of this financial year, there is around $161 million in loan funding available.
RIC interest rates are variable and reviewed every six months, bringing certainty to RIC customers that any change will be effective on 1 February and 1 August each year. Farm businesses with a concessional RIC loan benefit from no application fees, no ongoing management fees and no extra or early repayment fees. RIC loans have a 10-year term with interest-only repayments for the first five years, followed by principal and interest repayments for the remainder of the loan term. Eligibility and assessment criteria apply.
For more information on RIC loans visit www.ric.gov.au/loans