Nigeria to launch new bank focusing on agriculture
The new bank would provide loans at very low interest rates.The Nigerian government is planning to set up an agriculture-focused financial institution that would be owned by the Federal Government, farmers and other stakeholders in the agricultural sector, Minister for Agriculture,
Audu Ogbeh has revealed.
He told Vanguard that the new bank would cater to the financing needs of farmers and other stakeholders in the agricultural sector, providing loans at very low interest rates.
"Farmers and other stakeholders would be involved in policy formulation concerning the bank and would also determine the interest rate to be charged. The bank would not be profit-oriented, but would concentrate on meeting the financing needs of the country's agricultural sector," he explained.
He noted that commercial banks often lack commitment to financing agriculture, and often apply a 25 to 35 per cent interest rate on loans, which is not suitable for small farmers.
Currently, only two per cent of all bank lending in Nigeria goes into agriculture, a sector that accounts for 40 per cent of GDP and 70 per cent of employment, according to figures from the ministry.