Few banks are committed to the agriculture value chain in alignment with the Federal Government’s current policy focus of diversifying the economy and re-positioning the agriculture sector to play a lead role in economic development. KAYODE TOKEDE examines how First City Monument Bank (FCMB) has been supporting the government’s Agrobusiness drive and implementation of the government’s Economic Recovery and Growth Plan (ERGP), Medium Term Plan for 2017-2020.
The National Bureau of Statistics (NBS) this year had announced that four main economic activities comprising oil, agriculture, manufacturing and trade aided the nation’s economy out of recession.
It also showed that agriculture sector continued its strong and positive growth, which it had maintained throughout the recession, growing by 3.01 per cent in the second quarter of 2017, from 3.39 per cent in the second quarter of 2017 and 4.53 per cent in the second quarter of 2016.
The above implies that the government’s focus on diversifying the economy and re-positioning the agriculture sector is playing a lead role in economic development.
The ERGP has three broad strategic objectives — restoring growth, investing in people, and building a globally competitive economy — which it seeks to achieve by prioritizing, firstly, macroeconomic stability; secondly, agriculture and food security; thirdly, energy; fourth transportation infrastructure; and fifth, MSME-focused industrialization.
Federal government’s plan on ERGP will build on existing initiatives such as Growth Enhancement Support (GES) scheme; the Commercial Agricultural Credit Scheme (CACS); the Anchor Borrowers Programme; and the Nigeria Incentive-based Risk-sharing System for Agricultural Lending (NIRSAL).
The ERGP will also take into consideration the recently launched Green Alternative Agriculture Promotion Policy and the Presidential Initiative on Fertilizer.
However, Deposit Money Banks (DBMs) role is vital to the implementation of the government’s ERGP and some have shown commitment to the agriculture business and its value chain.
According to analysts, DMBs intervention in the agriculture business is expected to create food security and stimulate job creation, while also enhancing the income of farmers across the country.
Specifically, FCMB has been at the forefront of improving access to finance among farmers and uplifting agriculture from subsistence to commercial levels through the transformation of its value chain.
The holdings company in 2016 loan exposure in the Agriculture sector rose by 11.6 per cent to N3.1 billion from N2.8 billion in 2015.
Also, in 2016, the holding company on-lending facilities to CACS was N8.99 billion from N10.5 billion reported in 2015.
On-lending facilities represents government intervention funds granted by government financial institutions, Bank of Industry (BOI) and Central Bank of Nigeria (CBN) under manufacturing, agriculture, power, small and medium scale companies sectors.
These facilities are given to the Banking subsidiary at low interest rates, at a single digit for on-lending at a low rate specified under the schemes.
The bank of recent has improved access to finance and it is boosting local food production, improving nutrition, fostering rural development and generating foreign exchange for the country.
For the fact that Nigeria is a country blessed with favorable climatic conditions, ample arable land and fertile soils, some expert solution has been proffered.
FCMB has taken a bold step towards empowering small holder farmers as well as micro, small and medium scale enterprises which industry watchers now define as the nucleus of developed economies’ action points.
The same aspiration has been found in the heart of the present administration’s economic agenda. The Federal Government is said to have concluded plans to align its fiscal, monetary and trade policies to stimulate economic growth.
Vice-President, Professor Yemi Osinbajo, gave some hints.
According to him, “Government’s effort to restore growth depends very much on improved macroeconomic conditions. Accordingly, ﬁscal, monetary and trade policies are being aligned to stimulate the economy and support growth while preventing overheating” He confirmed that sectoral policies were being implemented by the Federal Government of Nigeria to diversify the economy by boosting investments in agriculture, manufacturing, mining, construction and the digital economy.
The Managing Director, FCMB, Mr. Adam Nuru said that it is a conscious business objective of the Bank to partner with government in various clearly defined economic activities that directly impact positively on the people, particularly the micro, small and medium enterprise segment whose daily activities supply cohesion in the basic energy chain of the nation’s economy.
In the area of agriculture, it is a concern however that as desirable as agriculture is to economic well-being, Nigeria is yet to maximize its potential.
This is as a result of a combination of various factors, some of which include the relegation of agriculture to subsistence farming; non-prioritisation of agribusiness at different levels of governance; the state of infrastructure such as research and storage facilities, extension and disjointed value chains and of course, the distraction occasioned by oil.
Fully conscious of the important role of key stakeholders in the agribusiness chain and as a strong believer in the potential of agribusiness in Nigeria, FCMB’s intervention in the sector has left a far-reaching impact on this crucial part of the economy.
This has been attested to by the Chairman of Tractor Owners and Hiring Facilities Association of Nigeria (TOHFAN), Alhaji Danladi Garba, when he commended FCMB for its support to the agric sector and farmers in Lagos. FCMB had provided funding worth N300 million to TOHFAN for the acquisition of tractors that were distributed to operators and benefiting farmers throughout Nigeria.
The Bank also collaborated with Doreo Partners, an impact investing firm with a proven track record of exclusively investing in profitable, high growth, early stage businesses that improve the livelihoods of Nigerian smallholder farmers, to launch a support programme for farmers, known as Babban Gona (or ‘’great farm’’).
This is an agricultural franchise model, where farmers are trained, provided end-to-end support, and offered specially packaged loans to carry out their farming activities.
In line with its commitment to financial inclusion which entails bringing the under banked and unbanked population into the financial system, a drive which the CBN has been pursuing actively, FCMB selected a region with a high degree of financial exclusion, bringing on board farmers in the Gimba, Soba and Maigana communities in Kaduna state.
Why PMB Should Reconsider Peace Corps Bill
PDP Goes To America Without Atiku
Work On 2nd Niger Bridge Excites Gov Obiano
Good News! Scientists Develop ‘Super Drug’ To Cure Diabetes
IGP Appoints Frank Mba As New Police PRO
NEWS14 hours ago
Gov. Dickson Commends Buhari On Choice Of Adamu As I-G
NEWS16 hours ago
Buhari To Inaugurate New Baro Port On Saturday
COVER STORIES3 hours ago
APC Suspends Okorocha For Anti-party Activities
NEWS16 hours ago
Troops Repel Insurgents’ Attack In Gajiram, Borno
NEWS17 hours ago
Jigawa Farmers Earned N19.78bn From Sesame Export In 2018 – Association
NEWS24 hours ago
6,203 Ekiti Teachers Get N146m Special Allowances
NEWS16 hours ago
JUST-IN: INEC Excludes APC From List Of Rivers Senatorial Candidates
NEWS15 hours ago
Mammoth Crowd Troop Benin Airport For Buhari