The Minister of Agriculture, Akinwumi Adesina as well as the Governor of Central Bank of Nigeria (CBN) and the Chief Executives of commercial banks in Nigeria have agreed to expand the loan tenor to farmers from six to twelve months as part of the resolve of the emerging generation of leaders to uplift the country.
According to the Minister who hinted at a breakfast meeting organized by the Federal Ministry of Agriculture and Rural Development in Abuja recently, the venture will ensure increase in food production in 2014; reduce inflation and enable banks to reconcile the modalities for seed to fertilizer supply chains and loans transacted during the dry season to wet season farming.
“One of the pillars of the decisions reached sought to convey the Federal Government’s appreciation for the contributions of the banks to the evolving agricultural revolution in the country. The meeting also discussed and resolved some challenges mostly bureaucratic in the loan repayment processes,” he said.
Akinwumi Adesina explained that the total amount lent to farmers in 2013 was N20 billion as against N3.5 billion in the preceding year; adding that the increase expresses confidence in the farmers resulting from the institutional structures which were created in the form of value chains. The institutional structures, he added have done so much to create and sustain confidence in the value chains as the Ministry is poised to reduce the risk of lending by banks to the agric sector.
He identified the banks which have greatly supported the Agric sector to include: Access Bank, Diamond Bank, Enterprise Bank, First City Monument Bank, Jaiz Bank, First Bank of Nigeria, MainStreet Bank, Sterling Bank, United Bank for Africa, Unity Bank, Wema Bank, Zenith Bank, Union Bank and the Bank of Agriculture.
“The registration of farmers which started in year 2012 has in 2013 reached 4.2 million farmers directly through the electronic wallet scheme. This means that about 20 million people have been impacted upon by the GES programme of the Federal Government,” he noted.
The Minister attributed the decline in inflation in the country to the slow rate of increase in the prices of food stuff and the Central Bank of Nigeria’s monetary policy. Inflation in Nigeria, he said is coming down for the first time since 2008; describing this as a remarkable development. According to him, the trend is because the Central Bank of Nigeria is doing a fantastic job in terms of monetary policy and the fact that agriculture is actually expanding in this country.
He disclosed further that when inflation figures were released by the Director – General of the National Bureau of Statistics, decline in inflation was largely attributed to slow rate in the increase of food prices and the recent surveys have continued to identify same. He therefore inferred that farm produce has been doing wonders since the Central Bank of Nigeria and the Agriculture sector are working together to reduce inflation the farthest it has been since 2008.
The Governor of the Central Bank of Nigeria, Sanusi Lamido Sanusi, who was represented by the Deputy Governor in charge of Financial System Stability – Kingsley Moghalu revealed that in the last one to two years, lending to agriculture has doubled and the CBN on its part has reduced the risk involved in lending to agriculture; saying this factor has kept banks away from lending to it.
“We felt that if we could help to de-risk the whole process, the whole question of lending to the agric sector can be seen on a commercial basis. NIRSAL has a different approach to development finance. It is a market-based approach as Agric is no longer about development, but a business,” the CBN Governor indicated.
Sanusi Lamido Sanusi observed that the Central Bank Nigeria as that of any developing country is responsible for the monetary policy as well as banking supervision. “We have to make sure as the guardian of the financial system that the institutions which we supervise contribute to making the economy of the country solid and sound,” he averred.
In the same vein, the bankers shared their experiences on the processes of lending to farmers as well as deliberated on the challenges currently faced by them to chat a new way towards increased lending to farmers in the years ahead.
Speaking on how NIRSAL has faired, the Group Managing Director of the MainStreet Bank, Faith Tuedor Mathews expressed the bank’s fulfillment in the partnership venture with the Agricultural Transformation Agenda of the Ministry. She added that out of the the sum of N20 billion lent to farmers in 2013, MainStreet Bank has committed N10 billion which is 50%. “Supporting Agriculture is about creating jobs, empowering people and ensuring food security. In terms of the proceeds received, all the Agro dealers have made their payments. On the whole, we should be able to do more than doubling the N20 billion in 2014,” she said.
In her closing remarks, the Permanent Secretary in the Ministry of Agriculture and Rural Development, Ibukun Odusote while appreciating the cooperation and commitment of the banks, appealed to them to increase lending to farmers and remain committed to their worthy desire to assist in transforming agriculture in Nigeria.
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