Types of Agricultural Loans in the Kingdom

Short-Term Loans:

These loans cover plowing wages, the cost of seeds, fertilizers, pesticides, fuel, fishing equipment such as traps and nets, compound feeds, and chicks for existing specialized projects. Repayment is required within a maximum period of one year.

Medium-Term Loans:

These loans cater to other agricultural fields, including all plant and animal agricultural activities, as well as financing specialized agricultural projects of various types. Repayment of these loans is made through annual installments over a period of ten years.

Given the diverse nature of agricultural investments and their varying requirements to start generating adequate returns for repayment, the fund provides grace periods tailored to each investment. This aims to ease the financial burden on farmers and support them in covering their initial investment expenses. For all standard loans (short- and medium-term) across various agricultural sectors and crop cultivation, a grace period of two years is provided. For specialized agricultural projects, the following grace periods apply:

• Dairy production projects: Two years.

• Sheep breeding and fattening projects: Three years.

• Small agricultural industries projects: Three years.

• Fruit orchards and palm farms: Six years.

The grace period starts from the date of the loan agreement for each type of project.

The fund’s policy aims to support and assist farmers—especially small-scale farmers—by simplifying the lending process. Farmers are granted loans covering 100% of the total cost of agricultural activities for amounts up to SAR 200,000. For amounts exceeding SAR 200,000 and up to SAR 3,000,000, the fund covers 75% of the cost. For amounts beyond SAR 3,000,000, the fund covers 50%.

For specialized agricultural projects, the fund finances 75% of the first SAR 3,000,000 of the project cost, based on the bank's study, and 50% of the amount exceeding that, with a maximum loan limit of SAR 20,000,000 for the total loan or the borrower’s liabilities.

The bank also encourages agricultural cooperative associations to play their role in serving farmers, especially in marketing-related areas and accompanying services such as cold storage, sorting, grading, and packaging. These associations are financed through loans that can cover the full required costs.