Bank of Agriculture injects N1billion to micro finance banks in remote areas

TO fast track access to finance in rural parts of the country, the Bank of Agriculture has injected N1billion for on-lending to micro finance banks in remote areas.

The National Project Co-ordinator for Rural Finance Institution building Programme (RUFIN), Alhaji Musibau Azeez disclosed this recently in Abuja while presenting a communiqué issued at the end of a Financial Linkage forum, organised by International Fund for Agricultural Development (IFAD) and RUFIN.

To facilitate access of the micro finance institutions to the N1billion lifeline,  Azeez disclosed that a committee has been set up to ensure that farmers get access to fund, calling on the development banks to increase the fund.

He disclosed that the target of the IFAD RUFFIN project was to attain a sustainable rural financial system in 12 states of the federation, in which 36 local government areas was selected, hinting that 33 rural microfinance banks had already benefited.

He stressed that the importance of the stakeholders meeting was to link commercial and development banks with selected Microfinance Institutions for refinancing their micro lending and also to increase access to finance in the rural areas by encouraging financial deepening.

The policy statement, however, stressed the need to facilitate the establishment of contact and involvement of RUFIN microfinance banks to access the N450 billion Nigerian Incentive-Based risk Sharing System for Agricultural Lending (NISAL) that is being promoted by the Central Bank and AGRA.

They further called for the need to get affirmative action from the local government chairmen to provide some level of funding to the micro finance banks.

Noting the contribution of the Bank of Agriculture and Bank of Industry in the funding of some MFBs, the forum advised RUFIN to follow-up the one billion naira set aside or on lending, so that the MFB’s can access the fund as soon as possible.

They enjoined the CBN to issue detailed guidelines on down scaling and financial linkage to assist and encourage Development Micro finance banks to actively pursue the programme of linkage and wholesale funding support to the financial institutions.

The statement further recommended that credit facilities to farmers and rural populace should be channeled through Micro Finance institutions across the country, appealing to that fund providers for Micro lending purposes to recognise the unique cash flow cycles for various farm products when structuring repayment cycles for agriculture lending.

They urged the RUFIN project to do a follow up the issue of interest rates between commercial banks and MFBs on one hand and the MFBS and Village Savings Groups, Micro Finance Institutions and farmers groups on the other hand.

RUFIN Technical Adviser, Prof. Adeniyi Osuntogun, however, urged micro finance institutions to make savings and deposit mobilisation to be an important aspect of their activities, adding that increase access to finance through the micro lending should be deepened.

One Comment

1. 

   evans

   October 24, 2011 at 4:18 pm

   Truth is , we have never been short of good initiatives in this country but implementation has been the problem. I hope they would be able to scale through this implementation challenge.

   Anaekwe Everistus Nnamdi
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