How to attract affordable loan under EU4Business initiative

The “Agrotem” farm grows oilseeds, breeds sheep and produces elite cheeses in Lviv region. In 2019, the company attracted a cheap loan of UAH 1 million from the Bank “Lviv” under a German-Ukrainian Fund loan programme for small and medium enterprises implemented under the EU initiative EU4Business. The loan went to replenish their working capital and purchase agricultural machinery. The farm monthly pays interests on the loan and will repay the loan itself after the harvest. The company plans to attract a second loan to expand cheese production.

The “Agrotem” farm operates in the village of Selysko (Lviv region) since 2014; the farm manufactures premium cheeses, home-made yogurt, milk and butter. Their products can be found in retail chains under the brand “Lviv cheese dairy “Jersey”.

For business development, the company succeeded in attracting 1 million UAH of loans with the aid of the ‘EU4Business’ initiative, which, in particular, aims to provide access to finance for small and medium-sized enterprises in Ukraine. It involves eight Ukrainian banks that allocate preferential loans to representatives of small and medium-sized businesses. Part of the loan or interest rate is offset by the European project partners. The peculiarities of business, borrowing and further development of the farm economy were told about by its co-founder Anna Temchyshyn.


About brand development

“My husband Oleg adored working in a village on a farm. His family – both his father and his grandfather – gave whole life to the collective farm. Love for land and livestock was transmitted, apparently, through DNA. And my husband taught me and the children to treat with respect and love to the earth,” she says.

Her two sons got education in agrarian sector and also work in the family business – son Oleg is engaged in farm sheep production, and Maxim is more in the field.

The “Agrotem” farm has three lines of activity. The first is crop production – corn, rapeseed and soybeans are grown on 250 hectares of land, and the crops are bought, in particular, by “Oliyar” company, an oil producer.

“The second line of activity is animal husbandry. We have 69 lambs, as well as 150 cows of Irish Jersey breed, whose milk is fat in comparison with other breeds – 5-6% fat and 3.8% protein. It is ideally suited for making cheese,” says Anna Temchyshyn.

The third line of the enterprise activity is, in fact, the processing of milk, the average daily rate of which per cow is 20 liters, and from the sheep – three liters. And from 1 ton 400 liters almost all kinds of hard cheeses are cooked – gauda, mozzarella, suluguni, moldy cheese, etc. Part of the milk is sold for bottling, for example, to the “Halychyna” company.

“Still, we produce home cheese and have a well-established line of yogurt production with fruit fillers. We founded the “Jersey” cheese dairy together with our friend Victoria Knysh and her husband Yaroslav. Capacity of the enterprise does not have time to satisfy the purchasing desires and needs of customers. Solid cheeses are ordered from us all over Ukraine. We are glad to present products at various specialized competitions and gastrofestivals,” says Anna Temchyshyn.

Elite cheeses under the brand “Jersey” can be found in the “Cheese Wanderings” retail chain, in their own store at the wholesale market “Verkhniy Shuvar” and in some supermarkets of the “Sil’po” network in Lviv. According to Anna Temchyshyn, the company does not hasten to leave for the international market; instead it concentrates in Lviv region.


About the prospects of business in the agricultural sector and the secrets of success

“Ukraine is an agrarian country, its economic and financial stability is precisely provided by the agrarian sector. Ukraine can export both raw materials and finished products. For this purpose all preconditions are created: human potential, raw material base and advantageous location,” Anna Temchyshyn believes.

She is convinced that in order for any business to be profitable, it must be laid out completely. Therefore, in the “Agrotem” company they work a lot and persistently, annually analyzing the achievements and losses of the company, and planning the next year. According to Anna Temchyshyn, just the planning, rather than anywhere else, is a secret of success.

“We promote healthy food: products without stabilizers, dyes. In the beginning we sold only milk for bottling, cream, butter. We saw that the products of craft production are very popular, and we expanded the production line,” she says.


About the loan from the EU4Business project

Last year, the company received a loan of 1 million UAH in “Lviv” bank, with representatives of which the company met at the International Agrarian Forum. The part of the received loan the “Agrotem” has spent on recycling needs, and also it purchased agricultural machinery – plow, soil spreader.

“The bank representatives came to our farm. Together, we counted all the risks and selected an individual loan program. The German-Ukrainian Fund, with which the “Lviv” bank cooperates, has credited the business with very loyal interest. The loan repayment scheme is adapted to the specifics of production: we pay accrued interest on a monthly basis, and the body of the loan will be paid after harvesting. Very favorable conditions for farmers, which became possible thanks to the EU4Business initiative of the European Union,” says Anna Temchyshyn.

We will add that to get possibility for Ukrainian entrepreneurs to obtain a profitable loan, the EU concludes contracts with the European Bank for Reconstruction and Development, the German-Ukrainian Fund and the European Investment Bank, which, in turn, conclude contracts with the Ukrainian banks on the implementation of programs for supporting small and medium-sized businesses . It is they who are the executive link for the issuance of affordable loans.

Recently, representatives of the German government came to the farm to check the intended use of funds. As Anna Temchyshyn tells, after this meeting, they jointly plan to install solar panels and a wind power plant at the farm. Representatives of the German side, in addition to financial support, promise to provide consulting and technical support. The company plans to re-apply for a loan from the “Lviv” bank, as they plan to expand the production of cheese due to increased demand.

“For three years we do not increase the number of dairy cows, because we just do not have a clear place. We plan to make a reconstruction of the premises for animals, increase the number of animals, and establish another milking range. Thus, we will increase the volume of milk production, but our own funds will not be enough for this,” says Anna Temchyshyn.

Also, the company plans to do farm tourism – to build a restaurant on the farm territory, where visitors and tourists will get the possibility to see the manufacture of products that they consume.

“Agrarians receive very little information. I hope that many entrepreneurs encouraged by my example will not be afraid to attract credit resources, attract funding from the EU, the German-Ukrainian Fund, the European Bank for Reconstruction and Development. A lot of business development programs are currently operating. It is risky, but it is necessary to take risks,” says Anna Temchyshyn.

For those who plan to take a loan for the first time, she advises first of all to clearly lay down the goals for which the funds are needed. And then, the entrepreneur says, the bank experts will calculate all possible risks and small points that will help to weigh all pros and cons. She is convinced that to develop their own business, it is necessary to look for and use different opportunities and be proactive.


Author: Mariana Tsymbalyuk

Source: Tvoe Misto