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FG needs to commit Nigerian banks to support agribusinesses, says expert

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Adeniji Kolawole, managing director of Niji Group, has called on the Federal Government to commit financial institution operators in the country to lend more to agribusinesses.

Speaking at launch of 50 units of tractors of Sonalinka assembled by Niji tractors at Ilero, Oyo state recently, Kolawole said that if truly the government wants to support agriculture in Nigeria it should ensure agribusinesses are able to easily access cheap credits.

According to him, most Nigerian banks do not understand agribusiness, adding that agriculture is an unusual business and banks cannot use office logics to solve the problems of agriculture.

“Agriculture is not like any other business you do and you can’t use the system in the office to solve it,” he said, “The banks need to come down to the farm, spend like six months and look at what the farmers suffer, before they say they want to support. If not, we can’t move forward,” he said.

On how the 50 units of tractors assembled by Niji tractors came about, he said that when Bank of Industry (BoI) approved the money to First City Monumental Bank (FCBM) for Tractor Owners and Operators Association of Nigeria (TOOAN) to acquire the tractors after meeting all the loan conditions, the Nigeria Incentive-Based Risk System for Agricultural Lending (NIRSAL) declined, allegedly without giving reasons.

“That was when we went to Africa French Development Bank for support to guarantee what NIRSAL cannot guarantee, after four months of TOOAN paying for the loan they didn’t actually receive. NIRSAL decline the transaction that they are supposed to support for no reasons knowing fully well that this group is well organised and they are on ground,” he explained:

“What will make NIRSAL not to guarantee a good transaction that will develop agriculture in Nigeria which we have to go to another country for guarantee. This means we are not ready for agribusiness in the country,” he said.

He lamented that the farmers were already paying interest on a loan they are yet to receive which makes loan payback almost impossible for farmers.

Also speaking at the event, TOOAN National President, Elesa Bitrus Yakubu, said the acquisition of the tractors would go down in history. According to him, the association approached the bank for a loan to finance 50 units of tractors, successfully negotiated, met the loan conditions and secured approval for the N500 million without intervention from government or any intermediary.

He however, lauded BoI considering TOOAN credit worthy. He also applauded FCMB and African Development (AFD) for their support and for also agreeing to manage the loan repayment and also provide guarantee for the loan.

“We are grateful to FCMB and AFD for trusting us on our merit to successfully repay the loan. This gesture is a golden opportunity, considering the fact that Federal Government agency (NIRSAL) that is supposed to provide the Credit Risk Guaranty (CRG) declined to consider our request despite our passionate appeals to grant us audience to discuss further on the CRG,” Yakubu said.

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