OTP Bank maintains its leadership in agrarian receipts financing and prepares new solutions based on agrarian notes
JSC OTP Bank remains the leading bank in Ukraine’s agrarian receipts market and is actively contributing to the development of a new digital financing instrument for the agricultural sector - agrarian notes. Representatives of the Bank participated in a meeting of the IFC Project Advisory Board dedicated to the development of agrarian notes, where market participants discussed the instrument’s performance and prospects for further scaling.
Since the introduction of agrarian receipts in Ukraine, approximately 12,600 agrarian receipts have been issued for a total value exceeding UAH 79.7 billion. Since OTP Bank began working with this instrument in 2017, the Bank has financed 1,400 agrarian receipts worth UAH 11.6 billion. OTP Bank accounts for approximately 14.5% of the total market volume and 77% of the banking financing segment, confirming its leading role in the use and development of this instrument.
“Agrarian receipts remain one of the most effective financing instruments for agribusiness for many years. They made it possible for agricultural producers who lacked sufficient hard collateral required for traditional lending to access financing. That was the key idea behind the instrument from the very beginning. Over the years, we have helped hundreds of clients attract funding for the development of their farms and accumulated significant expertise in working with this product. We see the next stage of market development in the digitalisation of processes. We are working to ensure that agricultural producers can access financing even faster and more conveniently, including through the OTP Agroportal. Agrarian notes open up new opportunities in this regard,” emphasized Ivan Yerko, Head of OTP Bank’s Agro Factory department.
During the event, participants observed the issuance of a financial agrarian note in real time and discussed the specifics of the new instrument together with representatives of the National Depository of Ukraine, the National Bank of Ukraine, the National Securities and Stock Market Commission, financial institutions, traders, and suppliers of agricultural inputs.
Agrarian notes represent the next stage in the development of financing instruments secured by future agricultural production. They operate alongside agrarian receipts but have a different legal and operational framework. An agrarian note is a non-issue security, existing exclusively in electronic form and recorded within the depository system.
“One of the key advantages of agrarian notes is the ability to issue them online without the involvement of a notary. This makes the process faster and more accessible for agricultural producers. In wartime conditions, this is also a matter of safety, as it reduces the need for physical presence and travel during the issuance process. In addition, the status of a security and the digital infrastructure behind agrarian notes create potential for circulation, refinancing, and the development of Supply Chain Finance solutions in cooperation with input suppliers, traders, processors, and retailers,” said Olha Volkova, Director of Sales for Medium and Small Corporate Clients at OTP Bank.
Another important advantage of agrarian notes is their broad range of potential applications. While agrarian receipts have historically been used primarily to finance crop production and future harvests, the legal framework of agrarian notes allows them to cover a much wider range of agricultural products and financing models.
“The key value of an agrarian note lies not only in the digitalisation of an existing instrument but also in its ability to scale agricultural financing. The status of a security, a standardised digital infrastructure, and the possibility of circulation create the conditions for attracting a broader range of funding sources and building new financial models around agricultural production. As a result, the agrarian note can gradually evolve from a standalone credit product into a fully-fledged element of the agricultural sector’s financial infrastructure. We highly value our long-standing partnership with OTP Bank and its leading role in implementing and scaling agrarian receipts in Ukraine. We welcome the Bank’s commitment to developing the next generation of this instrument and look forward to the first pilot transactions involving agrarian notes and their further gradual expansion,” said Kyrylo Mukhomedzyanov, Head of the IFC Project “Development of Agrarian Notes in Ukraine Based on Fintech Solutions.”
OTP Bank has already participated in transactions involving agrarian notes and is currently finalising its internal procedures for launching new solutions based on this instrument. The Bank expects that their development will expand agricultural producers’ access to financing, simplify and accelerate the fundraising process, and create new opportunities for cooperation between banks and other participants in agricultural supply chains.
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Public Joint Stock Company OTP Bank is a subsidiary of OTP Bank, which is the largest independent Central-Eastern-European banking group. JSC OTP Bank is one of the largest domestic banks, a recognized leader in the financial sector of Ukraine. The Bank provides a full range of financial services to corporate and private customers, as well as to small and medium enterprises. The bank entered the Ukrainian market in 1998, and since then it enjoys a staunch reputation of socially responsible, reliable and stable institution providing its consumers with services of European quality standard.
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