FG, IFAD scale up rural farmers’ access to credit

The federal government and the International Fund for Agricultural Development (IFAD), are implementing Rural Finance Institution Building Programme (RUFIN) in 12 states of Katsina, Zamfara, Adamawa, Bauchi, Benue, Nasarawa, Lagos, Oyo, Akwa Ibom, Edo, Anambra and Imo. RUFIN, which ends in 2016, is a seven-year loan agreement between the federal government and IFAD in order […]

The federal government and the International Fund for Agricultural Development (IFAD), are implementing Rural Finance Institution Building Programme (RUFIN) in 12 states of Katsina, Zamfara, Adamawa, Bauchi, Benue, Nasarawa, Lagos, Oyo, Akwa Ibom, Edo, Anambra and Imo.
RUFIN, which ends in 2016, is a seven-year loan agreement between the federal government and IFAD in order to develop rural financial institutions and link them to formal financial institutions so as to establish viable rural financial systems in the villages.
 The overall goal is to boost agriculture and rural micro enterprises because lack of access to finance and credit is the reason why the poor remains poor.
The major challenge is that the poor farmers cannot access credit from commercial banks because the collateral requirement is just too stringent.
The programme is developing farmers’ co-operatives, groups and microfinance institutions then link them together and employ group lending methodology to extend credits to these groups without collateral so as to deepen access by the rural poor to financial services.
According to Mrs. Unekwu Ufaruna, the Deputy National Coordinator of RUFIN, the programme is intervening at three levels of rural microfinance development namely; the Bottom Tier, focuses on developing financial awareness, stronger group management, savings and credit culture; the Middle Tier, seeks to strengthen the supply of rural financial services through Microfinance Banks (MFBs), Non-Bank Financial NGOs and financial co-operatives and development finance institutions such as the Bank of Agriculture (Boa); while the Top Tier, looks at improving the lending environment, funds flow and sustainability support to the sector.
Other institutions implementing the programme are the Central Bank of Nigeria, Bank of Agriculture and then the Federal Department of Cooperative.
During the FG/IFAD supervision mission to Imo and Edo states recently, Mrs. Ufaruna, told the Imo State Deputy Governor, Prince Eze Maduweke, that over N1 billion has been extended to the rural poor beneficiaries in Imo since inception.
She said RUFIN has also formed over 500 groups in the state since inception. About 280 to 300 of these are women groups because they are considered better players in credit recovery.
Mrs. Ufaruna stated that out of these credits that have been extended to groups, each individual member beneficiary of the facility has benefited for at least four circles, on the average and some have benefited 10 times, adding that their capital base and savings capacity have grown tremendously because part of the mandate of the programme is to inculcate savings culture into the rural poor.
She said 1200 jobs have been created in the last two years “because when we began, they were just trying to make their enterprises stable. It is on the 5th and 6th year that they started creating jobs.”
RUFIN in Imo State has accessed over N500 million but the state’s unpaid counterpart funding remains a huge challenge for the programme in the state.
Some of the beneficiaries in the communities in Ideato North and Isiala/Mbano LGAs such as Sunday Okoli and Justina Nwosu told Daily Trust they have learnt a lot through the programme and that it pays to start small and also save money no matter how small.
Sabastine Nnadi and L. A. Chukwu, both small holder farmers were furious with the state government for doing nothing to help poor farmers like them. Their communities in Ndiokereke do not have access road.
However, the Deputy Governor, Prince Eze while speaking with the supervision mission team in his office, promised to make strong case for the counterpart fund to be paid as the programme fights rural poverty.
In Edo State, the programme has extended over N1.2 billion to the rural poor in three local governments where the programme is implemented since inception.
The major challenge to RUFIN is that the state is yet to pay its counterpart fund, which could expand the frontiers of gains made.
The Commissioner for Agriculture, Prince Joe Okojie, stated that Edo State will take ownership of the programme since it will end in 2016.
Prince Okojie promised that the state will look at some of the challenges with a view to solving them; a promise Atsuko Toda the IFAD country manager is counting on.
On the field, more women in Edo are benefiting from the capacity training and the linkage with microfinance banks coupled with savings culture inculcated, they are expanding their farming and micro agri-businesses.
Women like Mrs. Victoria in Ugboko community and Madam Cecilia of Imosa Women group from Evboudobian community, need more money to buy cassava processing machines, which they said costs about N130,000.
While FG/IFAD is making effort to ensure the rural poor, who often don’t need more than N20,000, access credit, it seems that Edo State has not been participating.