Sterling Bank plans 10% loan for agric sector

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IN recognition of its significant contribution to the growth of the Nigerian economy, Sterling Bank Plc is ready to commit 10 percent of its total loan portfolio to finance the agriculture sector. Bukola Awosanya, group head, agriculture finance and solid minerals, Sterling Bank, said the bank’s commitment was a deliberate effort to support farmers.

Speaking at the recent summit on commodity value-chain investment and agribusiness support initiative, through public and private partnership in Abuja, Awosanya said agriculture financing constituted one of the five focal sectors of intervention for the bank alongside health, education, renewal energy and transport.

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, were some of the constraints to lending to operators in the sector. “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,” she said.

According to Awosanya, Sterling Bank is interested in providing funds to assist farmers to grow, although poor farmer education remained 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.

“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. Agriculture is a sector that has social impact. Without agriculture there will be no food and food is critical to the survival of man.

“The sector is the largest employer of labour and over 80 percent of the players in the sector are smallholder farmers. We want to help these smallholder farmers to make their businesses bankable and profitable so that they can fend for their families and send their children to school. That is why the bank has dedicated 10 percent of its loan book to impact in that sector.”

– June 7, 2019 @ 17:32 GMT |

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