Scots remain loyal to banks despite charges
Scottish farmers continue to be loyal to their banks, despite rising charges, according to NFU Scotland.
In a survey by NFUS, Scottish farmers said they were paying, on average, an overdraft arrangement fee of 1.34%, with the highest being 4% and the lowest 0.31%.
The average overdraft interest rate was the Bank of England base rate plus 3.69%, but some farmers were paying as much as base plus 8%.
Three quarters of respondents said they had been with their bank for more than 10 years and loyalty of more than 60 years was recorded.
However, many farmers reported instances of poor customer care and sharp practice which prompted some to consider changing banks.
“There is also a strong feeling among respondents that the farmers are paying the price for the reckless availability of credit that brought so many of the banks to near collapse.”
Scott Walker, NFUS
NFUS chief executive Scott Walker said the majority of farmers had no problem accessing credit but the cost of credit has increased, in some cases by huge levels. NFUS will be meeting with the Scottish banks later in the year to discuss some of these issues and find out what the market will look like in the future.
“There is also a strong feeling among respondents that the farmers are paying the price for the reckless availability of credit that brought so many of the banks to near collapse,” he said.
“That has upset some, as agriculture remains a stable and safe sector to lend to.
“Given the traditional loyalty of farmers to their bank, it is reasonable to expect that loyalty to be reflected in service, the fees paid and the access to credit.
“We hope banks appreciate that agriculture is in a better place than many business sectors but is highly capital intensive and can face real spikes in both costs and returns.
“On the basis of this limited survey, many farm businesses are still able to secure credit, but having to go through more hoops to secure it and at a higher cost than before. Both for the rural economy and wider economic activity, we would want banks to play their part in easing this spiral of pressure.”
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