Sterling Bank Plc said it has committed 10 per cent of its total loan portfolio for the financing of agriculture in recognition of the significant contribution the sector is capable of making to the growth of the Nigerian economy.
Group Head, Agric Finance and Solid Minerals, Sterling Bank, Mrs. Bukola Awosanya, who disclosed this at a recent summit on Commodity Value-Chain Investment and Agribusiness Support Initiative through PPP in Abuja, said the bank’s commitment is a deliberate effort to support farmers and ensure that the “value chain is properly tied end to end.”
Mrs. Awosanya explained that agriculture financing constitutes one of the five focal sectors of intervention for the bank alongside health, education, renewal energy and transport (HEART).
She noted that the absence of good agricultural practices, failure of farmers to repay loans, inconsistency in government policies as well as bad weather, among others, are some of the constraints to lending to operators in the sector.
She said, “we want to encourage farmers but if the input is bad, the output will fall short of expectations. For instance, poor seed quality is an issue; lack of infrastructure such as bad roads is also an issue because it makes distribution of the harvest from the farm to the market difficult.
“Government policy also affects lending to the sector because after the bank has concluded arrangements to finance some farmers, the government may decide to lift a ban on the importation of the commodity. What happens to the ones you have done? So government policy is also a problem in agriculture.”
However, Awosanya said Sterling Bank is interested in providing funds to assist farmers to grow although poor farmer education remains an issue. “There is a need to train farmers on the need to always repay a loan because when loans are not repaid, banks will not be encouraged to lend to them again,” she said.
She added: “We also want government to ensure that they don’t just talk the talk but do what they set out to do. We spoke about fluctuation of price. If government doesn’t come up to mop up funds so that prices are stable, it is also a problem to finance agriculture.”