Debt discounting less successful

Press, 10 April 1987, Page 12

Debt discounting less successful

An increasing number of debt discounting applications from Rural Bank borrowers are being declined, according to the Minister in Charge of the Bank, Mr Colin Moyle. Answering a Parliamentary question from Waitaki member of Parliament, Mr Jim Sutton, the Minister said the trend reflects creditors’ inability to provide sufficient concessions to, give reasonable prospects of medium to long term viability. At March 10 the bank had approved 1307 applications for debt discounting. Another 108 borrowers were “assisted to achieve viability by other means” including extensions of their loan terms, Mr Moyle said. In reply to another question from Mr Sutton on farmer indebtedness, the Minister said that at February 1987, farmer

lending by trading banks was 2.5 per cent higher than the previous year. “Stock and station agent advances at January were 5 per cent lower than a year earlifer,”. Mr Moyle said. Farmers had a financially good season in 1984/85, which generally enabled seasonal loan balances with trading banks and stock and station agents to be reduced. Indebtedness rose early in 1986, with strikes at meat works resulting in a further significant increase in farmer debt during March and April last year. “By October, lending to farmers by trading banks was brought, back to within 9 per, cent of the level a year earlier,” he said. / , Since then lending has been reduced further to the February level.