Announcement of Peru to Borrow One Hundred Thirty Million Dollars for Agricultural Credit on June 9, 1983

FOR IMMEDIATE RELEASE,, .World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 83/103 Contact: Ciro Gamarra June 9, 1983 ( 202) 47 7-5320 PERU TO BORROW $130 MILLION FOR AGRICULTURAL CREDIT Over 45,000 farm families in Peru will benefit from an agricultural credit project supported by a $130 million loan from the International Bank for Reconstruction and Development (IBRD). The $239 million project aims at assisting the government's efforts to accelerate growth in agriculture and improve living conditions of farmers. At present, Banco Agrario del Peru (BAP), the country's main agricultural credit source, provides mostly short-term working capital loans because of limited domestic sources. The IBRD loan will enable the Peruvian bank to increase the flow 0£ credit to provide both working • capital, and medium- and long-term investments to individual farmers and cooperatives for crop and livestock operations. In addition, investments in irrigation infrastructure, land improvement, equipment, and agro-industry will be financed. The project will strengthen and upgrade the Peruvian bank's information system to enable the management to gather data necessary to improve decision-making. Studies will be undertaken to prepare a sugar rehabil::itation program and a rediscount facility to stimulate commercial bank involvement in agriculture. To help spur Peru's agricultural development, the IBRD ltas made 14 loans to the country totaling $249 million. The loans have helped provide agricultural credit, farm machinery, and irrigation works. Banco Agrario del Peru itself and its predecessors have received five loans totaling $55 million. The IBRD loan is for 17 years, including four years of grace, at an annual interest rate linked to the cost of Bank borrowings. The loan also carries an aunual commitment charge of O. 7 5% on undisbursed balances, and a front-end fee of 0.25% on the amount of the loan. NOTE: Money figures are expressed in U.S. ~ollar equivalents • •