CBN, Union Bank Pledge to Promote Agric Financing

The Central Bank of Nigeria (CBN) and Union Bank of Nigeria Plc has reiterated their commitment to financing the agricultural value chain in order to improve access to finance for farmers and rural dwellers.

In their separate speeches presented at the opening of a conference themed “Propelling Economic Development through Functional Agricultural Value Chain Financing Models,” in Lagos, both institutions noted that the best way to improve financial flow to the agricultural sector and rural communities is through enhanced understanding of the components of the value chain.

Group Managing Director of Union Bank, Mr Emeka Emuwa, said in the current financial year the institution will be engaging directly with farmers in a bid to understanding the entire segments of the business, thereby making it easier to inject more funds than have been invested in the past.

"We will continue to invest in agriculture. In the past years, agriculture has played a significant part in our business but we want to look at the entire value chain more intently. we want to engage with rural farmers directly and not just from the policy level," Emuwa said.

The Union Bank chief executive said the conference organised by the African Rural and Agricultural Credit Association (AFRACA), had afforded the bank an opportunity to further build capacity towards championing agriculture for the socio-economic growth of the country.

Describing the importance of the sector to the economy, he noted that at the moment 32 percent of the Gross Domestic Product (GDP) and 65 percent of labour force were accounted for by the agricultural sector in Africa.

"If you can get agriculture to become more productive, you will be better positioned to tackle the scourge of poverty in the continent. It is unfortunate that there has been a decline in the sector due to the emergence of other economic sectors in Africa. In Nigeria, it is the emergence of the oil and gas sector that stunted the agricultural sector," he explained.

He however noted that lending to farming in Nigeria had improved in the past 4 years from around one percent to over 4 percent in 2013.

While stressing that the major challenge has been the high risk and uncertainty, which makes it difficult for operators of the agric sector to access credit, he expressed optimism that a deep understanding of the value chain will help to overcome these challenges and boost.

Representing the acting Governor of the CBN, Dr Sarah Alade, the Director in charge of research at the apex bank, Mr Charles Mordi, pointed out that the primary objective of the federal government is to boost the growth of the real economy, which is chiefly represented by the agricultural sector.

To underscore the importance of the sector to government, Mordi disclosed that the federal CBN had initiated various scheme to boost funding of agriculture which he said included the Agricultural Credit Guarantee Scheme established in 1978; the N200 billion Commercial Agriculture Credit Scheme and various other initiatives.