In the last five years, agriculture funding by Nigerian banks has more than doubled. Several banks are presently lending to their customers involved in agriculture under several schemes under the auspices of the Central Bank of Nigeria (CBN). These loans are for new investments and expansion of commercial agricultural enterprises.
In 2010, Diamond Bank made “a measured” entry into financing the agriculture sector by engaging an international consulting firm to assess the risks and opportunities across all agricultural value chains of crops and livestock of economic importance in Nigeria. The outcome formed the basis for setting up the bank’s agrifinance desk ahead of the CBN’s directive to all commercial banks to set up specialized desks focused on lending to agriculture.
Diamond Bank adopts a commercial approach to lending to agribusinesses focusing on gaining market share that follows the main investment trends; non-oil exports, import substitution, agro-processing, retailing and engaging in partnerships with catalyst agencies to develop markets and specific value chain financing products.
Consequently, the bank has provided improved access to finance through key considerations into its pricing, products, underwriting processes and marketing strategies with more than N100 billion disbursed to over 400 agribusinesses across the various nodes of the agricultural value chain in the last five years.
Head, AgricFinance, Diamond Bank, Lois Sankey, stated that the bank is very passionate about growing and driving financial inclusion through proven agricultural value chain financing models especially in the rural areas.
“The programme we are currently working on, the Rice Anchor Borrower Programme has direct impact on financial inclusion and rural financing and we have N2.5 billion as portfolio exposure appetite to this programme alone. That is a lot of commitment considering that the cost of production per hectare is a mere N178, 000” Sankey stated.
According to her, Diamond Bank is leveraging its partnership with USAIDMARKETS2 and other agencies on the project to support and Improve capacity and livelihoods of small holder rice farmers in target states across Nigeria.
Agric finance milestones
Some of the major milestones in Agrifinancing at Diamond Bank includes signing of $33 million Agrifinance, two years Agric Technical Assistance programme with International Finance Corporation (IFC), targeting 2000 small holder farmers and $33 million small holder loans; training of 60 key members of staff along the agriculture value chain within the bank in partnership with USAIDMARKETS II Programme, engagement with Africa Cocoa Inputs Finance pilot with Technoserve. More than N5 billion has been disbursed to 15 projects under CBN’s Commercial Agriculture Credit Scheme, active participation in other previous and on-going CBN and Federal Government intervention programmes and working to support about 750 small holder rice farmers in Benue state under the Rice Anchor Borrower Scheme with MIKAP Ltd.
Focus on women farmers
According to the Food and Agriculture Organisation (FAO), women make up to 43 per cent of the agricultural labour force in developing countries. Research shows that on the average, their yield are about 20 percent to 30 percent lower than men because they have less access to land, improved seeds, equipment and most importantly finance and information.
Diamond Bank in a strategic move is focusing on female farmers by providing free technical training and financial grants to rural women involved in agriculture. The initiative which is called Beta Life for Female Farmers is aimed at empowering female farmers across the 36 states of the country and reducing poverty level.
Chief spokesperson, Diamond Bank, Ayona Trimnell, stated that the bank’s strategic move to help female farmers in the rural areas improve their crop yields and farming method is rooted on the fact that increased farm yield by women can significantly help in reducing the current food gap.
“Women form a large pool of farmers in the country today and they contribute significantly in the food production basket. But they are hardly considered when measures for increased yields are being introduced by either the government or other investors. We believe that if women farmers are fortified with the necessary knowledge on how to improve their yields and have access to funds, they will do well and the food import bill will reduce significantly,” Ayona stated.
According to her, the primary aim of the Diamond Bank female farmers’ project is to help engender improved quality of life for women farmers in Nigeria through business funding, education and technical support on agronomic practices and training on financial management.
This intervention forms part of the bank’s Women’s Wealth and Well-being Initiative which has three main objectives including empowering women economically especially in the area of agric business, providing basic health care education and services to women in rural areas, leading to improved productivity, growth and value addition of women in the cassava value chain.
The first phase of the project which commenced in 2014 involved training 200 women in Oyo and Ogun states on best agronomic practices. Other areas of the training and capacity building programme involves, access to credit-either for production or processing and financial advisory services, agricultural extension and research services; technical assistance on processing and access to markets and assisting the groups in inculcating a savings culture through the opening of BETA Savings for the targeted groups and group members.
The project also aims at developing capacity and strengthening farmer organisations through the provision of improved inputs and mechanised farm equipment by the bank. These innovative processes is projected to enhance productivity, increase efficiency, improve the processes and entrench practical benefits for the selected women producers and their agri-businesses.
The initiative will also facilitate access to information on best agronomy practices and access to markets through international organisations and research and development Institutions; open access to credit and sustainable financial management practices. Currently 200 women in cassava production and processing in Oyo and Ogun states have benefitted from the programme, which is still on-going with plans to replicate same model across the country in the next three years.
Women farmer groups
In its resolved bid to strengthen and improve the living standards of women farmers in rural areas in Nigeria, Diamond Bank as part of its CSR initiative trained and equipped the following farmer groups in Ondo and Oyo states.
The farmer groups in Ondo include Agbajowo CMC Processing Group, located in Shagari village, Akure; Agbeloba Cassava Processing Group, Ile-Oluji Farm settlement; AduraAgbeagba Cassava Processing Group, Ile-Oluji.
Others in Ondo State include Oluwapawopa Cassava Processing Group, Owo; Okonilewo Cassava FUG Cooperative Society, in Igba.
In Oyo State, the farmer groups include, Onipepeye Cassava Processors Group, Ikulodi; AlaseGari Processing Group, Iseyin; Agbeloba Cassava Farmers Groups, Iganna; Agbelere Cassava Farmers Group, Fiditi and GarriGbayi Cassava Processing Group, Iseyin.
With Federal Government’s resolve to diversify the economy, strengthen agriculture and increase its contribution to the GDP, it is obvious that Diamond Bank’s CSR initiative and partnership with female farmers will impact positively on local food production and attract many unemployed youth into farming, thereby reducing the high unemployment level in the country; and bridging the food supply gap.
Undoubtedly, Nigeria is endowed with abundant natural resources such as solid minerals, oil and gas as well as arable land for agriculture, among others. And, despite being the seventh most populous country in the world with abundant youth workforce, reports show rising youth unemployment and only about 40 percent of Nigeria’s arable land is being cultivated, thus leading to food supply deficit and huge food import bill.
But agricultural development in the country has remained sluggish and agrarian, with farmers using crude implements and women being mostly hit with low farm yield, inability to access funds from financial institutions, limited access to land and lacking the requisite knowledge on how to improve yields in their farms.