Under the Subcomponent, loans shall be issued to beneficiaries to finance the costs of one operating year for annual crops, including:

• current costs of seed and planting material;
• current costs of pesticides, organic and mineral fertilizers, and biological plant-protection products;
• hiring labor and agricultural machinery for agricultural work;
• current costs of fuel and lubricants for machinery used in agricultural work;
• costs of one-season irrigation pipes.
  
  

Loans may be issued from February 1 through October 31 of each year, pursuant to the relevant ordinance of the Government of Georgia.

To use the Subcomponent, the potential beneficiary must be registered in the Registry of Farms and Rural Enterprises.

Geographic Coverage

The geographic coverage of the Component includes all municipalities of Georgia.

Loan amount issued to a beneficiary per season: not less than GEL 10,000 and not more than GEL 100,000, inclusive.

For grain crops: not less than GEL 10,000 and not more than GEL 300,000, inclusive.

Annual interest rate: the interest rate charged by the financial institution for use of the loan issued to the beneficiary shall not exceed 18%.

The loan term and repayment schedule shall be determined by agreement between the beneficiary and the lending financial institution.

Agency co-financing of loan interest: for a period of up to 12 months, at an amount equal to the refinancing rate established by the National Bank of Georgia.

Co-financing of loan interest shall be provided for a period not exceeding 14 months from disbursement of the loan or its first tranche.

Loan co-financing shall be disbursed after the beneficiary confirms that the loan proceeds were used for their intended purpose by submitting an audit report to the financial institution within 12 months after disbursement of the loan (other than a refinanced loan).

For the maximum cultivation and maintenance cost for one operating year of annual crops, calculated per 1 ha, see Annex No. 15.

The land plot in which the loan proceeds are to be invested must be owned, co-owned, or lawfully used by the borrower in accordance with the legislation of Georgia.

In the case of co-ownership, the consent of the co-owners to use the property during the loan co-financing period must be available; in the case of a right of use, its term must not be shorter than the loan co-financing period.

In the case of a cooperative holding agricultural status, the loan proceeds may be invested in land plots owned by the cooperative's members/interest holders.

With respect to a loan issued under the Subcomponent (other than a refinanced loan), within 12 months after disbursement of the loan the beneficiary shall submit to the servicing financial institution an audit report confirming use of the loan proceeds for their intended purpose; such use shall not exceed the maximum cultivation and maintenance cost for one operating year of annual crops, calculated per 1 ha.

Any loan terms not addressed in this Article shall be governed by the co-financing terms established under the Preferential Agrocredit for Current Assets Component.

On-site inspection shall be conducted to confirm performance of obligations under the Annual Crop Financing Subcomponent of the Preferential Agrocredit for Current Assets Component.

General Terms

• Any procurement contemplated by the project shall be carried out only after execution of the co-financing agreement, from an entrepreneurial natural person and/or legal entity registered in accordance with the legislation of Georgia and/or through importation.
  In the case of procurement of services, procurement from a natural person shall also be permitted.
• A potential beneficiary may not participate in the Program, and co-financing shall not be disbursed to a beneficiary, if:
  • the potential beneficiary or existing beneficiary, or its founder, member, or shareholder, holds an ownership interest in a legal entity registered in accordance with the legislation of Georgia that supplies the relevant goods and/or services under the project;
  • the individual entrepreneur itself acts as the supplier of goods and/or services;
  • the potential beneficiary/beneficiary or its representative serves as a manager of the company supplying the goods and/or services.
     

Eligibility Criteria for a Potential Beneficiary

The potential beneficiary must be registered in:

• the Registry of Farms and Rural Enterprises.