AFEX commodities exchange moves to bridge financing gaps among smallholder farmers
AFEX Commodities Exchange Ltd, an organisation in the commodity exchange market, says it is working assiduously to bridge financing gaps being experienced by smallholder farmers to break the circle of poverty among them.
The Business and Development Manager of the organisation, Mr. Akinyinka Akintunde made this known on Thursday in Abuja.
Akintunde said the move became necessary following untold hardship suffered by smallholder farmers in spite of accounting for over 70 per cent of the country’s farm produce.
The manager said that in spite of the huge potentials in agriculture, bank credit allocation to the sector was less than five per cent, while financial intervention had made a little impact over the years.
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He said as part of efforts to bridge those financing gaps, AFEX had launched a number of platforms to engage farmers and to assist them access credit facilities.
“Our participation in the Agriculture Summit Africa is to pronounce the role of AFEX in bridging the financing gap. We are talking of a trillion-dollar economy across Africa.
“One of our mandates is to ensure that the smallholder farmers, who are responsible for producing over 70 per cent of the products we consume, have a fair return on what they produce.
“This is what formed the partnership between AFEX, Sterling Bank, to create a platform that was unveiled at the just concluded Agriculture Summit Africa.
“The main idea behind it is, producers of commodities will have access to financing using their commodities as collateral and this has brought great benefits for them.
“It allows them to ride on the incremental price of commodities without losing stock. It gives them access to credit and makes them financially independent.
“Once you have all these in place, you discover that the circle of poverty that smallholder farmers are used to, gets broken and from there a farmer’s productivity will improve and his livelihood will be much more positively affected.
“This is because they have better returns for their commodities and they have better access to finance, “ Akintunde said.
The manager further disclosed that the organisation’s plan to launch another key product, a training platform that would enable retail investors to invest in agriculture.
He said the idea behind the platform was to find alternative means of financing commodities in Nigeria without relying on the government.
According to him, the organisation partners with the Ministry of Agriculture’s Strategic Grains Reserve Department to take over some warehouses that provide facilities to smallholder farmers.
“ One of our mandates is creating markets where smallholder farmers can sell their commodities, having access to prices that buyers are buying directly from middlemen.
“Basically, we are removing non-value adding middlemen from the system.
“Since 2014 to date, we have been able to engage over 100,000 farmers. We traded about 110,000 metric tonnes of commodities with a focus on dry grains and oilseeds across all sectors.
“We also play an active role in the input. We partner with a lot of input producers like OCP, INDORAMA, Flour Mills of Nigeria, to provide quality inputs to all these farmers wherever they are.
“And the drive for this is, when you increase the input available to them, you get the chance to increase the yield that comes out at the end of the day,” he said.
Akintunde said that the organisation was working with relevant stakeholders to meet farmers’ financial needs.
He noted that the AFEX in 2018, worked with some partners to conduct Bank Verification Number (BVN) registration in some rural communities as one of the steps to prepare them to access loans facilities.
“We have been able to access credit for smallholder farmers across Kaduna, Katsina and Taraba States.
“We are focused on these states because they are the production centres for most dry grains and oilseeds across the country.
He said besides helping farmers to access credit, AFEX had also created a market where buyers and sellers would conveniently transact business with their commodities.
Akintunde said AFEX was registered with the Securities and Exchange Commission (SEC) to maintain global best practices in service delivery.