Are Nigerian banks embracing agriculture?

An agribusiness expert and a farmer, Alhaji Muktar Augie, visited some banks recently in Abuja, the Federal Capital Territory (FCT) to get the above information aimed at advising farmers especially the local smallholders, but got frustrated after being tossed here and there by the bank officials at the customer service desk of some of the […]

An agribusiness expert and a farmer, Alhaji Muktar Augie, visited some banks recently in Abuja, the Federal Capital Territory (FCT) to get the above information aimed at advising farmers especially the local smallholders, but got frustrated after being tossed here and there by the bank officials at the customer service desk of some of the banks.
Initially, the expert who may not be considered as a valuable customer to bankers because, according to him, “I do not have huge idle money in my account,” thought this assignment could be quite easily done but later discovered that the officials were so evasive in handling the request, especially when agriculture which seems not to be in their good books was mentioned. If he had mentioned either property, oil and gas or any other area believed to be money spinning by the bankers they would have attended to him with speed.
Augie said after about one week of sojourning from one office to the other of 10 of these banks in different locations in Abuja such as Garki, Asokoro, Wuse II and Central Business District failed to yield fruit, except only one seemingly doubtful contact that was sympathetically obtained. The doubt was however, confirmed when calls put through to the contact in order to ascertain the authenticity were unanswered, the line even went off at a point in time.
“Ideally, in this internet era, it is expected that one should be able to walk into any branch of a bank and get simple information without much ado, but the reverse is the case in our dear country especially when it concerns agriculture. The search and the dribbling continued endlessly until I suspected that it’s either they don’t have the information or that they had something to hide.
“I later realised after taking a thought that the issue was beyond the two suspicions as some Nigerian banks still neglect agriculture despite reports of improvement in agriculture lending in recent times by the Minister for Agriculture, Dr Akinwumi Adesina. This claim by the minister seems not to reflect the real situation as the peasant farmers are complaining bitterly of being neglected by the banks,” Augie said.
Recently, the All Farmers Association of Nigeria (AFAN), which is the apex farmers union in the country disagreed with Adesina over loan given to farmers. The minister was reported to have said at an event in Kenya that lending to agriculture in Africa is poor but the situation in Nigeria is different as innovative risk sharing instruments have been put in place to encourage the banks to lend to farmers and that under the arrangement, billions of naira got to the farmers in form of loan.
AFAN President Architect Kabiru Ibrahim punctured the minister’s claim saying that the target of agriculture loans should be the smallholders not portfolio farmers. “I am not aware of any smallholder farmer that benefitted from such loan. If they gave the loan to briefcase farmers, then that is not agric loan since it was not given to real farmers,” Architect Ibrahim told Daily Trust in an interview.
It is instructive to note that over the years, Nigerian banks have been shying away from agriculture funding due to high risks and other negative factors that affect farming. The situation seems to have defied solution as recent developments are pointing to the fact that many of the banks do not want to hear the name agriculture let alone local farmer, even as agriculture insurance and the Nigerian Incentive-based Risk Sharing Agricultural Lending (NIRSAL) have not succeeded in making any difference.
A rice farmer, Alhaji Jaafar Musa, said: “Imagine what it will take a local farmer to get an agricultural loan from any commercial bank in the country if an agribusiness expert cannot get just simple contacts of heads of agriculture desks until he travels to the bank headquarters wherever it is located.
“Nigerian banks should borrow a leaf from banks in Kenya and South Africa among other African countries where farming and the farmer are held in high esteem, while the government should introduce policies that will step up bank lending to smallholder farmers. But I know that if the Nigerian banks refuse to sponsor agriculture, they should be ready to pay a lot to manage the crisis hunger will cause,” he said.