Mainstreet Bank is set to increase its lending to agriculture sector to N20 billion in 2014. Group Managing Director Mainstreet Bank, Faith Tuedor-Matthews disclosed this at the formal flag-off of the 2013/2014 Dry Season Farming Support Programme which held at the banquet Hall of the International Conference Centre Abuja.
She also commended the current Agricultural Transformation Agenda (ATA) of the Federal Government as a revolutionary initiative which has accelerated the nation’s quest for food security.
The ATA initiative, she noted, has further encouraged Nigerian banks to brace up to the challenge of lending to the agricultural sector.
Highlighting the experience of the banking industry prior to the introduction of the initiative, she noted that bank lending to the Agricultural sector was below 1 per cent of total bank lending, however within two years, this figure has grown to N368bn which is a growth position of 4.29 per cent. She further noted that the banking industry has set a target to grow lending in the Agricultural sector to 7 per cent and subsequently to 10 per cent by 2017.
Sharing her industry experience of Growth Enhancement Support Scheme (GESS) in the last two years, Faith Tuedor-Matthews noted that Total Bank lending under the GESS has grown from N4 Billion in 2012 – N20 Billion in 2013.
Through the Federal Ministry of Agriculture and Rural Development programme; the Nigerian Incentive-based Risk Sharing System for Agricultural Loans (NISRAL) the GESS initiative has been able to successfully mobilise fertilizer agro-dealers, farmers, suppliers, seed companies to create an effective distribution mechanism that eliminates middlemen and the attendant corruption which existed in the input distribution chain
Under the scheme, Mainstreet Bank lent N10bn to 30 Agro-dealers in 2013 and recorded zero default. She maintained that whilst previously the Bank would not deal with Agro-dealers because they lacked the structure to qualify for borrowing, today the story is cheering as all the loans to the dealers are performing whilst through the scheme, over one million farmers have been reached and this translates to more jobs as a result of the additional hands who have been employed through this initiative. She further maintained that following from the experience of Mainstreet Bank, many banks have now realized that lending to Agriculture is a viable business, noting that there is great optimism that the target of N60bn lending to the GES