Money deposits banks in the country have given a total of N556.5 billion to farmers in the first quarter of 2017, 14.6 per cent increase from N485.6 billion it gave in the corresponding quarter of 2016, according to data from the National Bureau of Statistics (NBS).
On a quarter on quarter basis, loan from the banking sector to farmers increased by 5.8 per cent from N525.9 per cent in Q4 2016 to N556.5 billion in Q1 2017, the banking report states.
Key industry players who spoke to BusinessDay stated that the 14.6 per cent year-on-year increase is a welcome development, adding that a lot still needs to be done on cheaper interest rates for agro credit.
The experts said that the biggest challenge confronting farmers is insufficient access to agro credit at single interest rates, which, according to them is limiting farmers’ ability to boost productivity and improve their livelihoods.
“Finance is the biggest challenge confronting farmers. It is a very serious problem that the government need to address by providing farmers will single digit loans,” said Tola faseru, national president of the National Cashew Association of Nigeria.
“We need very cheap fund so that our products can be competitive globally,” Faseru said.
Currently, the average interest rate farmers get loans from money deposit banks is between 28 to 30 percent, say experts.
The sector has seen tremendous increase in investments in and credit for farmers as Nigeria makes frantic efforts to ensure that agriculture play a key role in its quest for economic and revenue diversification.
The Federal government through the Central Bank of Nigeria (CBN) had adopted measure to ensure that the banking sector lend to critical sectors of the economic like agriculture.
“Farmers and agro processors should be able to access agro loans at cheaper interest rates of at most five per cent,” said Eric Umeofia, chief executive officer, Erisco Foods Limited.
Josephine Okojie
