Fixed-term, fixed-rate machinery and equipment finance is on offer from new lender AgriBank, which lends only to the agricultural sector.

AgriBank offers high-rate savings products online to fund farm lending for terms of up to five years.

“The whole model is very simple,” said co-founder Matthew Smart, managing director of Eastern Counties Finance, which he founded 13 years ago after seven years with BNP Paribas bank. “There are no currency risks, all deposits are in sterling and all lending is in sterling.”

The recent departure of ING and others from the UK leasing market has reduced the choice of this type of funding over the past few months.

Mr Smart’s co-founder is Frank Sekula – both have banking and farming family backgrounds. They will use specialist brokers to offer the funding to farmer customers while the savings products will mostly be sold online.

AgriBank hopes to attract savers by offering interest rates up to 10% higher than those paid elsewhere. Its deposits are not currently covered by a depositor compensation scheme but products with depositor protection will be introduced in future, said Mr Smart.

“UK agribusiness is at the centre of our activities because we know the sector well,” said chairman Mr Sekula. “It is relatively low risk. We plan to operate a traditional banking model by taking deposits and lending them to farmers who we know will pay them back.

“Our aim is to offer savers more competitive rates than those currently offered by banks by focusing solely on the sector that we know – and being very efficient at delivering our services.”

AgriBank’s head office is in Malta, with its European banking licence issued by the Maltese Financial Services Authority. It has UK Financial Services Authority approval to offer banking services in the UK.

Mr Smart’s ECF business lent £92m of new funds in agriculture last year, including some mortgage business as well as its core machinery and equipment funding.

Its average machinery lending is for between £25,000 and £30,000, while average lend including mortgage business is £40,000 to £50,000 for three to four years and at rates between 5% and 6%.

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