Nigerian farmers to receive finance boost
Nigeria's agriculture sector is to receive improved access to finance, after the country's central bank (CBN) announced plans to ensure commercial banks increase lending to firms in the industry.Farms and other agriculture businesses currently receive two per cent of total lending and the CBN intends to increase this to ten per cent over the next five years.
The move was announced by Acting Director of the Development and Finance Department at the central bank Paul Eluhaiwe, who was speaking at a press briefing ahead of a conference focusing on the Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL), which has access to a N75 billion (€338 million) fund allocated by the CBN.
Mr Eluhaiwe was quoted by Business Day as saying the initiative will repair the value chains in the agriculture sector, therefore encouraging banks to lend with confidence without relying on government money.
According to a NIRSAL report, agriculture accounts for 70 per cent of the total labour force across Sub-Saharan Africa, however banks have been unwilling to lend to farming businesses in Nigeria as they do not see the sector as a positive investment and lack the infrastructure needed to distribute funds efficiently.