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Agriculture secures 4% of banks’ loans

By on December 10, 2013

The Federal Government has said that the agricultural sector now gets four per cent of the total loan portfolio available in the Nigerian banks.

The Minister of Information, Mr. Labaran Maku, who said this while briefing journalists on the progress that the government had made in the agricultural sector, noted that the Agricultural Transformation Agenda had added nine million metric tonnes of food.

He said more funds were now going to farmers from local and international investors as well as financial institutions.

He said, “The Nigerian Incentive-based Risk Sharing System for Agricultural Lending, which was introduced by the Central Bank of Nigeria and the Ministry of Agriculture and Rural Development last year, has guaranteed N25bn of agricultural loans.

“This development has increased lending to the agriculture sector to four per cent of banks’ total loans from the average of 1.5 per cent in 2009. NIRSAL is based on five pillars that aim to reduce risk in agricultural lending and lower the cost of lending for banks.”

He said NIRSAL programme was based on five pillars – risk sharing, insurance, technical assistance, holistic bank rating mechanism and bank incentives mechanism, adding that $500m had been shared among the pillars.

Maku added, “To break down banks’ perception that agriculture is a high-risk sector, NIRSAL will share their losses on agricultural loans.

“The facility’s primary goal is to expand insurance products for agricultural lending from the current coverage to help reduce credit risks and increase lending across the entire value chain.”

The minister said that as a result of government’s favourable policy on agriculture, several corporate organisations were now investing massively in the sector.

Meanwhile, members of the Developing Eight Countries Organisation for Economic Cooperation, otherwise known as D-8, have met in Abuja to discuss ways of enhancing food security globally.

The delegates at the Fourth D-8 Agricultural Ministerial Meeting on Food Security called for concerted effort in halving the proportion of under-nourished persons in the world.

The D-8 is made up of the Nigeria, Turkey, Iran, Bangladesh, Egypt, Indonesia, Malaysia and Pakistan. It accounts for 13 per cent of the world’s population.

The Secretary-General, D-8, Dr. Seyed Mousavi, said the current economic environment was faced with harsh realities of global economic recession and food crisis.

 

 

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