FEDERAL GOVT./ BANK EXPAND LOAN TENURE TO FARMERS FOR INCREASED AGRO BUSINESS

The resolve of the emerging
generation of leaders to uplift
this nation was demonstrated
yesterday as the Nigeria Minister
of Agriculture, Dr. Akinwumi
Adesina, the Governor of Central
Bank of Nigeria (CBN) and the
Chief Executives of Commercial
banks agreed to expand the loan
tenure to farmers from
6-12months.
This is to ensure further increase
in food production in 2014,
reduce inflation further and most
importantly to enable banks
reconcile the transactional ends
of the seeds-fertilizer supply
chains and the attendant loan to
transition during dry season to
wet season farming.
This was one of the pillars of the
decisions reached at a breakfast
meeting organized by the Federal
Ministry of Agriculture and Rural
Development in Abuja which
sought to convey the Federal
Government appreciation of the
contributions of these banks
toward the evolving agriculture
revolution in the country.
The meeting also discussed and
resolved some challenges mostly
bureaucratic, in the loan
repayment processes.
Dr. Adesina hinted that the total
amount lent to farmers this year
2013 was N20billion as against
N3.5billion in the preceding year,
adding that this expression of
confidence in the farmers came
as a result of creation of
institutional structures in form of
value chains which have done so
much to create and sustain
confidence to fix the value
chains, we continue to reduce
the risk of lending by banks to
Agric sector"
The Minister thereafter named
the banks that have greatly
supported the Agric Sector as
Access Bank, Diamond Bank,
Enterprise Bank, FCMB, Jaiz Bank,
First Bank and Mainstreet Bank.
Others are Sterling Bank, UBA,
Unity Bank, Wema Bank, Zenith
Bank, Union Bank and Bank of
Agriculture.
Dr. Adesina said that the
registration of farmers which
started in year 2012 has by year
2013 reached 4.2million farmers
directly with electronic wallet
scheme, adding that, this meant
that about 20million people have
been impacted by the GES
programme of the Federal
Government.
The Minister also attributed the
decline in inflation to the slow
rate in the increase of food
prices and the CBN's monetary
policy. "Inflation is coming down
in Nigeria for the first time since
2008 and that is a remarkable
thing. This is happening because
the CBN is doing a fantastic job in
terms of monetary policy and the
fact that agriculture is actually
expanding in this country, when
the inflation figures were
released by the DG, National
Bureau of Statistics, the decline in
inflation largely is also
attributable to the slow rate in
the increase of food prices, the
recent harvest continue to
contain food prices.
That is to say farm harvest is also
doing wonders. So basically you
get CBN and agriculture working,
and that is why you are finding
out that inflation is going down
as fast as it is which is the fastest
rate since 2008."
The Governor of Central Bank,
Mallam Sanusi Lamido Sanusi,
who was represented by the
Deputy Governor in charge of
Financial System Stability, Dr.
Kingsley Moghalu, said it is
remarkable that in the last one to
two years, people have been
lending to agriculture double and
what the CBN did in contribution
to this was to de-risk lending to
agriculture because, the risk
factor, according to him, has kept
banks away from lending to the
Agric sector.
As he further explained, "we felt
that if we could help de-risk the
whole process, this whole
question of lending to the Agric
sector can be seen on a
commercial basis, NIRSAL is a
different approach to
development finance, it is a
market based approach, Agric is
no longer about development,
Agric is a business".
Moghalu believed that CBN as the
Central Bank of a developing
country has its responsibility not
limited to monetary policy or
banking supervision, "we have to
make sure as the guardian of the
financial system that the
institutions that we supervise
make their contribution to the
economy of Nigeria, becoming a
solid sound economy".
The bankers shared experiences
on lending to farmers, discussed
the challenges being currently
faced and chatted a new way to
increase lending to farmers in
the coming year.
Speaking on how the NIRSAL has
faired, the Group Managing
Director Mainstreet Bank, Ms
Faith Tuedor Mathews said her
bank is proud to be partner in
the Agricultural Transformation
Agenda of the Ministry. She made
known that on the total of
20billion lent out to farmers in
2013, Mainstreet Bank has
committed 10Billion which is
50%. As she also said,
"supporting Agriculture is about
creating job, empowering our
people and also ensuring food
security for us in terms of the
proceeds we have received, all
the Agro dealers have made their
payments. On the whole, we
should be able to more than
double the N20billion

Sources: fmard.gov.ng