New agribusiness financing instrument generates uncertainty in the market

Brazilian exchange B3 will soon start accepting applications for the listing and over-the-counter registration of the Investment Funds in Agroindustrial Productive Chains (Fiagro). But, although those structuring the first investments - and investors in general - have the best expectations with the new market alternative, producers and the financial sector have doubts about the interest rates that will be practiced. To be competitive, they cannot be much higher than of official rural credit lines."Initially, the benefit for accessing the credit will be small. Little, short of saying none. Today the producer is after the benefit of subsidized interest rates, and Fiagro is money from the free market", said an experienced executive of the banking system with a focus on agrobusiness.This executive does not see the possibility of investors who invest money in banks in agribusiness bonds, such as Rural Producer Bills (CPRs), running to the new funds. "Why would investors accept to receive less than at banks, which are experienced and where there is no counterpart risk, to lend to someone they don't know?", he asks.According to another specialist, Fiagro's money will in fact not be cheaper. "It's a cool product, there is demand, but this story that money will become cheaper and more accessible doesn't exist."José Angelo Mazzilo Júnior, deputy secretary for Agricultural Policy at the Ministry of Agriculture, disagrees. "We need to facilitate funding, and Fiagro will be an important part in this process, increasing flow of resources and reducing funding costs for agribusiness," he said to Valor.According to him, Fiagro will force adjustments in the financing models of the current agribusiness creditors and allow the entry of new funders. "The [agriculture]...

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