• Bankia signs agreement with Saeca (Sociedad Anónima Estatal de Caución Agraria) to provide financing to farm, forestry and agrofood sectors
• The situation in the sector, the crisis and the drought were key factors in arranging this new line of credit that provides farmers and livestock breeders with a way out of the current difficulties

Bankia has launched the credit line "Drought 2012" for farmers in Ávila and Segovia. This new facility arises from an agreement with the public sector farm guarantee company Saeca (Sociedad Estatal de Caución Agraria) and is available for clients who are repaying loans under the farm sector 2008 and 2010 line of financing backed by Saeca.

In 2008 the Spanish Ministry of Agriculture promoted a credit line for improving the financial structure of the farm sector. That line was supported by the regional government of Castilla y León, which signed the relevant agreement with Caja Segovia and Caja Ávila. In 2010, given the difficulties faced by the sector the Ministry of Agriculture promoted an addendum to lengthen the grace period by another two years. Caja Segovia and Caja Ávila signed the addendum in order to collaborate in supporting the sector.

Repayment of the principal of these loans begins over the course of 2012 and, once again, the sector's situation, the crisis and drought are making it extremely difficult to meet those payments.

Given this complex situation facing the farm sector, which is of capital importance to the local economy, Bankia has decided to arrange this new line of credit to provide a viable alternative for farmers and livestock breeders in the region.

In addition, Bankia has decided to offer its clients the possibility of restructuring their loans under this Line without Saeca guarantees, adapting the structure of the new financing to the needs of the borrowers who do not have backing from Saeca.

Characteristics of the new "Drought 2012" credit line

The maximum sum to be guaranteed by Saeca will be the aggregate of the new loan proposed, taking into account that the first 40,000 euros will benefit from having subsidy of their guarantee and administrative charges.

The economic conditions, maturities and form of repayment of the new Line are being negotiated according to the needs of the sector.

The operations formalised in the past by Caja Segovia and Caja de Ávila under the previous drought credit facility that is now being expanded amount to 14.6 million euros and 10 million euros, respectively.