FADAMA Micro Finance Bank, Nigeria’s first farmers’ lender, is targeting credit access to over 1.5 million farmers in the 17 local government areas of Plateau State in order to boost yield and provide more jobs.
The Fadama Bank has 70 percent of its share capital contributed by the Plateau State farmers, but with technical assistance from the FADAMA 3 project of the World Bank Group. The bank offers loans at single digit interest rate of 3.5 percent.
The bank, which is geared towards assisting the subsistence farmers in financial inclusion services, has current capital base of N20 million, and has been rated under unit one of the Central Bank of Nigeria’s category for Micro-Finance Bank.
BusinessDay was informed by the bank authorities of their plans to upscale the capital base to N100 million, which would enable it improve credit access for 1.5 million Plateau farmers.
During an assessment tour, BusinesDay found out that many Plateau farmers were already taking advantage of Fadama Farmers Micro-finance Bank in facilitating their lending from the bank, whose customer base has grown to over 15,000 clients.
Gideon Dandam, board chairman of the bank, speaking with BusinessDay in Plateau, said,” The bank was designed to sustain a Tempo of continuity of FADAMA projects. It was designed in such a way that once you fund the community with the grant received from the World Bank, the farmers are supposed to implement the activity, and after harvests, they are expected to save 5-10% in what they are able to generate.
”The farmer is expected to open a bank account, which is called ‘FADAMA user equity Trust Fund.’ That account is expected to be a source of deposit where each of the community that has been supported and funded with FADAMA projects, would make deposits in that account.
“Also, once that fund is established, the farmer is expected to revolve that account so that it would be able to reach out to other farmers in that way more farmers are captured into financial inclusion nets and access the loan credits.”
Speaking further on the model of assisting the farmers in doing business with the bank from the sale of their proceeds, he said: “We have an officer in the field who is responsible for assisting the Rural farmer, and we call her ‘Rural Finance and Livelihood Officer.’
“We also have staff called facilitators who also assist the Rural farmer in building his or her agribusiness skills, and above all savings culture.”
BusinessDay found out that the bank, established in 2016, records about 98 percent success with minimal loan default.
Its managing director, Habillah Muktar, said 965 farmers had so far accessed the loan, with the bank’s total loan portfolio standing at N14 million so far.
Already, the CBN recently inspected progress on the bank while the Nigeria Deposit Insurance Corporation (NDIC) was expected to give adequate cover.
Esther Bitrus, a retired journalist formerly with the State’s Broadcasting Corporation and now a farmer in the state capital Jos, who now heads a cooperative for farmers called Timsak Multi-purpose Cooperative, told BusinessDay, “The cooperative society started when FADAMA 1 started, and started mainly as an All widows cooperative, but currently, many women have joined in the co operatives many of whom are not widows.
“Also, we started few years back, and once we heard of the opportunity in FADAMA Bank project, we started pulling resources together and mobilising our women with monthly contributions during our meetings.”
Also, she said, “We have individual accounts, and cooperative account in the FADAMA micro finance bank. This has helped our women to grow their income and be financially inclusive through agribusiness lending.
“The market has been very good, and we don’t have any challenge with off takers, and with the new improved technology of ‘Green House’ our crops mainly, Tomatoes, Peppers, Carrot, Ginger and others are free of pesticides and many shops like Shoprite in Abuja comes to buy most of products.”
The bank effectively took off as a unit MFB in 2016, after the CBN granted it temporal permit in 2015 to assist rural farmers have a financing model, and sustain projects and programmes earlier facilitated by FADAMA 1 and 2 through proper financial agribusiness model.
