Agricultural loans – from idea to realization

Financing of agricultural and food industry development programs is achievable from short-term, agricultural loans from banks.

Potential beneficiaries of the loan are natural and legal persons (family farms, farms, crafts, companies, cooperatives) in the rank of micro, small or medium-sized enterprises.

Creditworthiness of farmers

Creditworthiness of farmers

Agricultural loans, just like non-performing loans, require the user to meet the general criteria of creditworthiness that ensure a regular repayment of the bank. The creditworthiness of a farmer is assessed differently depending on whether the entrepreneur has declared his activity as a natural or legal person.

Employed natural persons (in crafts or companies) prove their creditworthiness on the basis of regular monthly earnings. The Bank will also check the regularity of fulfillment of the monthly obligations of the potential borrower under already existing debts.

A natural person who earns income from the pursuit of an independent agricultural activity may be a taxpayer whose income from the independent activity is flat-rate taxed. The banks’ view on lump sums is different. The amount of credit to be granted to the lump sum is usually determined by the tax base of the loan seeker.

Revenues earned in the previous year are reduced by the amount of taxes and divided into twelve months. The value obtained represents the farmer’s income, that is, the basis for calculating his creditworthiness.

Thus, the creditworthiness of farmers is determined on the basis of regular monthly earnings or the amount of net earnings.

What documentation is needed for a creditworthy farmer?


Croatian banks treat farmers as natural and legal persons, and the amount of the loan sought is the most common criterion for placing an entrepreneur in a particular category.

The basic documentation used to prove the creditworthiness of farmers is payroll, a certificate of income from the tax administration, BON 2 and other documentation supporting the solvency of the farmer’s business.

Documentation defining the farmer desirable for the bank:

  • decision on entry in the Register of agricultural holdings
  • certificate of allocation of the farmers’ registration number
  • a certificate of OIB and a copy of the farmer’s identification document
  • request for a crop crop incentive (Form No. 1) for the current year, with receipt on receipt
  • copy of the concluded contract (on purchase of finished agricultural products) with the buyer

Banks have been paying more attention to farmers lately


Entrepreneurs engaged in agricultural activity most often borrow from banks to resolve current liquidity issues or to buy working capital (procurement of raw materials, adaptation or construction of new facilities, expansion of herds, crops, etc.).

Attempting to realize a loan at a bank often resulted in the transfer of entrepreneurs from one bank employee to another, without finding a credit solution for the farmer. The banks have finally decided to put an end to this, and credit lines intended for farmers are increasingly appearing on offer from Croatian banks.