BY MICHAEL EBOH
Banks in the country have commenced the sensitisation and enlightenment of stakeholders in the finance and agriculture sectors on the method and mechanism for the disbursement of the N30 billion fund set aside for agricultural financing in the country.

Speaking at the Workshop on financing agricultural input supply scheme — 2012 farming season, Mr. Aigboje Aig-Imoukhuede, Chairman, Bankers’ Committee Sub-Committee on Economic Development and Managing Director, Access Bank Plc, said the decision to undertake the sensitization and enlightenment programme was borne out of an agreement by the banks prior to the signing of the Memorandum of Understanding, MoU.

According to him, the entire document on the financing scheme was initially drawn up by six banks, who later presented it to the other banks in the country on the platform of the Bankers’ Committee for inputs and comments.

He said the comments and inputs of the remaining banks were incorporated into the final document and in the preparation of the MoU, with a general decision that a series of workshop be convened to educate and sensitise stakeholders on ways to benefit from the scheme, especially as it is less than 30 days to ensure that the fund get to people in need of it.

Aigboje disclosed that banks in the country have resolved to contribute significantly in Nigeria’s real sector development and general economic growth.

He said the mechanism is designed to provide N30 billion of financial support at single digit interest rate to provide the much needed financing support to agricultural input dealers to ensure immediate supplies of essential inputs to farmers across the nation for the 2012 farming season.

He said under the MOU that was signed, November 29, 2011, the Banks/Financiers shall provide a total loan facility of up to N22.689 billion for financing fertilizer and N2.752 billion for seeds procurement and distribution respectively, while the Federal Government through the Federal Ministry of Finance shall guarantee 70 per cent of the loan principal payment under the said scheme.

He further noted that the loan shall be made available to duly registered/approved agricultural input dealers across the six geopolitical zones at a subsidized interest of seven per cent per annum.

“It is envisaged that this new and innovative partnership would ensure that atleast 5,000,000 farmers have access to these essential agricultural inputs,” he said.

The Access Bank boss further stated that participating agricultural input dealers shall be expected to provide 25 percent of the required amount as equity contribution to access the facility from any of the participating banks in the country.

The programme is as a result of the Federal Government of Nigeria’s recently launched Agricultural Transformation Agenda in line with its strategy of using agriculture as a key driver of our national economic transformation agenda.

A key element of the agricultural transformation initiative is the promotion of agricultural financing through the Nigeria Incentive-Based Risk Management System for Agricultural Lending (NIRSAL), which focuses on de-risking the entire agricultural value chain and thereby attracting the desired flow of investments from the private sector and foreign investors.