BNZ aims to fund dairy suppliers

The Bank of New Zealand has launched a finance package to assist Kiwi Co-operative Dairies suppliers meet the industry's commitment to four per cent annual productivity growth.

BNZ Managing Director Peter Thodey said the package was a first for the banking industry.

"The Farm First Dairy Share Loan product recognises the fair value of Kiwi Co-operative Dairies shares and for Kiwi shareholders to grow their milk solids production, they are required to purchase more shares to top up their holdings within the company's Fair Value Share Standard policy."

He said the financing is available to existing and new Bank of New Zealand customers who are Kiwi suppliers and has been designed in close association with Kiwi.

The bank intends to work with Global Dairy to offer a similar product to shareholders if and when the merger of New Zealand's two major dairy groups takes effect.

Mr Thodey said the BNZ's loan package was linked to wholesale interest rates.