Westpac makes loans a sustainable option

Richard Rennie NEWS Finance

FARMERS wanting to face climate change head-on and adapt their business sooner than later can leverage their way ahead with Westpac’s latest sustainable farm loan offering.

The bank used Mystery Creek Fieldays as the launch pad for two new sustainable farm lending packages, a sustainable farm loan and a sustainable business loan.

Bank agribusiness head Tim Henshaw said the sustainable farm loan offers a “whole of farm” opportunity to borrow, make changes to the property’s climate change resilience, and receive a discounted interest rate.

The farm client will receive a .2% discount off the existing loan interest margin across all term debt associated with the entire farm business.

“This is about the entire farm, not just for a specific project and the discounted interest rate which is effective from day one incentivises the farmer to move the farm to a more sustainable, resilient asset.”

The farm owner will have two years from signing on the loan to deliver on their adaptation proposals, where they must meet a Westpac sustainable farm standard.

“One aspect farmers are really liking is that we are using existing work done. If you already have an assurance report through your

The discounted interest rate, which is effective from day one, incentivises the farmer to move the farm to a more sustainable, resilient asset.

Tim Henshaw Westpac

processor, you do not have to do that again.

“Farmers don’t like duplication, and we can take the quality plans they may already have in place from the likes of Fonterra or Synlait, for example, and then there is just a bit more on top of those to do mainly around climate adaptation, understanding climate change risk, and what to do to mitigate.”

Input for Westpac’s standards has come in part through the Sustainable Agricultural Finance Initiative (SAFI).

This initiative developed guidance for sustainable agriculture finance that takes note of emerging international frameworks as well as existing good farming practice standards used by New Zealand growers and farmers. AsureQuality will be undertaking the farm assessments. Prior to launch the loans were trailled on drystock and dairy clients.

Westpac also used Fieldays to