New loans up at Farm Credit

Farm Credit Canada has posted another increase in the number and total dollar amount of new loans to farmers in its 2007-08 fiscal year.

In its annual report, released Thursday, the federal ag lending agency listed $4.28 billion in new loans for the year ending March 31, up from $3.71 billion in 2006-07. That’s spread over 32,561 loans, up from 28,684 the previous year. The average loan size was $131,600, up from $129,504 in 2006-07.

FCC’s total lending portfolio grew to $14.99 billion, up 10.6 per cent from $13.55 billion in the year earlier. The total number of loans in the portfolio dropped from 101,470 in 2006-07 to 98,066 in the 2007-08 fiscal.

“Agriculture is an important business in Canada and producers and agribusiness operators consistently impress me with their passion and commitment,” CEO Greg Stewart said in a release Thursday. “Their success is why FCC experienced another solid year, in spite of the challenges faced in some sectors.”

The lender posted net income of $205.1 million, up from $203.8 million the previous year. Net income is reinvested in agriculture, FCC said. Its return on equity in 2007-08 stood at 13.1 per cent, down from 15 per cent the previous year.

The Regina-based agency said it approved over $500 million in new lending to young farmers in the 2007-08 fiscal, and also introduced Start Now-Pay Later, which it said allows producers to gain “financial stability” before having to make loan payments.

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