Bosses at Anglia Farmers have launched a new finance scheme aimed at helping members gain quick access to short term funds of at least �5000 to pay for purchases through the buyers' co-operative.

The finance scheme is designed to benefit both lenders and borrowers by providing a vehicle to enable lenders with surplus funds to lend to other members who require short term finance which can be used to pay for Anglia Farmers purchases.

Clarke Willis, AF chief executive, said the initiative which had already built up a �150,000 fund was launched in response to demand from members. Members will be able borrow in �5,000 increments under a 6pc interest rate, which can be used to fund purchases such as fertiliser and seed.

'Our members cover 900,000 hectares of land and there is a fair capital base there,' Mr Willis said. 'Some of them have got surplus funds which at the moment isn't earning them a vast amount of money, while on the other hand we have members we know are looking for revolving credit.'

He said one advantage of the scheme was that the purchasing co-operative, which is based at Honigham Thorpe, near Norwich, had the necessary financial wherewithal to carry out the appropriate checks to ensure the confidential service worked smoothly.

'In the current climate of low interest rates, investor members will receive a better return on their money as the interest rate for investors will be set above the market rate,' he added. 'This rate will, however, be below the market rates normally available to borrowers making this a win/win situation for all participating members.'

The scheme, which has been headed up by AF board member George Bell, is being run through a wholly owned subsidiary company called AF Finance Limited and is a similar model to those currently being encouraged by the Bank of England, he said.

Funds will be held for a fixed period of months and will be repaid on a fixed date and all funds collected will form part of a pooled fund which will be held on deposit to be lent to borrowers. Lenders are able to enter the scheme at monthly intervals but are required to commit to lend from the time they enter until 15 January 2013. The scheme will be run again starting in February 2013.

'An independent structure has been established to ensure that any lending risk is carried by the lenders and not by the membership generally but AF's knowledge of the borrowers' trading patterns should minimise the risk to lenders' Mr Clarke said.