Sterling Bank announced that it has dedicated 10 percent of its overall loan portfolio to help finance Nigeria’s agricultural sector.
The bank noted that this is being done in recognition of the fact that the sector is one of the major contributors to the growth of the nation’s economy.
The Group Head of Agriculture Finance and Solid Minerals at Sterling Bank, Mrs Bukola Awosanya disclosed the development at a recent summit on Commodity Value-Chain Investment and Agribusinesses Support Initiative through Public and Private Partnership (PPP).
Awosanya disclosed that the bank’s dedication to the agricultural sector was a predetermined intention to help farmers and ensure that the value chain is properly tied end to end. She revealed that most lenders have been reluctant to provide credit facilities for the company because of the absence of good agricultural practices, the inability of farmers to meet up to loan agreements and bad weather.
According to Awosanya, “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”.
Speaking further on the issue, she said “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”.
Awosanya noted that there is the need for farmers to be educated on the importance of paying bank loans, because if loans are not repaid, banks will not be motivated to give them loans again.