Elders makes rural lending inroads

Launched just last year, Elders Rural Bank is likely to achieve a foothold of at least 10 per cent of the rural debt market in the next three to four years.

Elders sees itself as a rural player filling a niche the majors find difficult to service:

  • provide finance for affluent farmers who require finance packages that the major banks cannot offer.
  • make its new lending products easier for its vast network of agents easier to provide

Ian Mansbridge, Elders managing director, pointed out that through its network of agencies it was more economic for Elders to arrange a loan of $20,000 for a herd of cattle. Such a small transaction could not be justified by the majors.

The bank is now also offering credit against grain deliveries meaning that farmers can access funds despite not receiving final payment for sometimes up to two years by the Australian Wheat Board.

Elders has established an extended distribution network through Bendigo Bank branches. Rural consumers have experienced greater choice and Elders has found little conflict with Bendigo products.

It also means through Bendigo Bank, Elders customers can enjoy services expected from a bank such as ATM and bill paying facilities.

Elders Rural Services is most strongly represented in Western Australia and South Australia, but together with Elders Rural Bank is gaining ground quickly in the eastern states.

Currently Elders has

  • $1.2 billion in assets
  • a cost to income ratio of 40% (ANZ leads the majors with a ratio of 47%)
  • posted a 10.25 million after tax profit to June 30 this year