Who really controls farmers' loans: the shadow of ILTE behind the banks' backs

National Development Bank ILTE clearly states that decisions on loans to farmers are made not by it, but by its funding partners – banks and credit unions. At the same time, however, the Authority itself sets the conditions under which these decisions are taken. This dual system raises the fundamental question – who really determines whether a farmer receives finance?

It's the banks that decide – but according to the rules of ILTE

ILTE stresses in its answers that funding is provided through partners and that it „is not involved in the assessment of specific borrowers“.

In other words, the final decision on a loan is made by the bank or credit union. At the same time, however, ILTE itself sets the rules for financing: what the requirements are for clients, what conditions apply to loans and what projects are considered eligible. This means that while the financing partners formally make the decision, the actual decision environment is shaped by the ILTE.

Ignas Jankauskas, a financing expert and head of MB „Skaičiai žemdirbiams“, puts it even more bluntly – according to him, the influence of ILTE on the decisions is greater than officially acknowledged.

„The bank or the credit union decides first, but quite often it happens that ILTE simply imposes additional requirements“, – he says.

According to the expert, the problem stems from the different assessment models: „It happens that the credit institution calculates the indicators, and they are in line with them, but when they go to ILTE with the same indicators, they are no longer in line.“

In such cases, the financing process stops – even if the bank was willing to lend.

A system where the farmer „goes door to door“

Policymakers' assessments show that in practice this system becomes complicated and not always clear to farmers.

Kęstutis Mažeika, Member of the European Parliament, remarks: „It is as if a farmer goes to one office and is then sent elsewhere. He goes from door to door.

This process, he says, undermines confidence in the system and may be one of the reasons why the number of applications remains limited.

When asked who actually decides on funding, politicians have no single answer.

Bronis Ropė, chairman of the Parliament's Rural Affairs Committee, says: "Both. Funding partners set their own conditions when they give money, ILTE then negotiates its own conditions.“

At the same time, ValiusĄžuolas stresses that the final responsibility should still lie with ILTE itself: „Whatever happens, ILTE is responsible for that final result.“

This confrontation reveals a fundamental problem – the decision chain is fragmented and the lines of responsibility remain unclear.

Who helps the farmer when the bank says „no“?

In theory, the answer is simple – in such a case, a public authority should intervene.

„If the bank says yes, that's exactly what you need to go to ILTE and fill in the application“, – says V.Ąžuolas.

But practice shows that this is the weakest link. If the bank assesses a project according to one set of criteria and ILTE assesses it according to another, the farmer can be left between two systems: one where he is still a "good fit" and the other where he is not. Even the politicians themselves admit that the system does not work clearly enough.

„As things stand, it's like the saying – it's up to the drowning man to save himself. The farmer himself remains responsible for his own salvation, because no one stands behind him," concludes Mažeika.