Why banks don’t give agric loans to individual farmers– NIRSAL

Access Bank
The Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL) Plc has said that most money deposit banks and other financial institutions are not interested in giving agric loans to individual farmers.

NIRSAL Head of Corporate Communications, Mrs. Anne Ihugba, said in a chat with The Whistler, that many farmers who are not members of the agency’s agro geo-cooperatives initiative have been denied credit facilities by banks.

The issue of credit guarantee for farmers has been a major setback in Africa’s biggest economy.

According to her, securing loans to invest in farming and its associated value chains is difficult for a single farmer in the country.

Ihugba said: “It is always difficult for a farmer, but it is not as difficult for the farmers. We advocate for economies of scale. We said instead of you farming ten different hectares, come from farmer groups. Choose a leader, choose a vice president and choose a treasurer come together and agree on what to farm.

“Take for instance rice; we will give them the right seed; we will give them the right protection and we will monitor it from start to finish.

“The idea is that once you are able to grow that rice, we will get them an off-taker. Once we get them the off-taker, whatever they pay, we will now take our own per cent.

“Once we give them the off-taker, it means that finance has been immediately sent to the farmers. That is the best way. No bank is interested in a one-man farmer.”

She explained that some farmers do not understand the geographical location where the right plant will grow.

According to her, the lack of understanding from these sets of farmers makes it difficult to secure loans.

She said, “When you form a cooperative, you go to the Corporate Affairs Commission and get a certificate which means you are an organization and you have a bank account.

“Then we can now approach a bank for a loan and we guarantee and share the loan risk for up to 75 per cent or less. So that banks will only risk 25 per cent of the loan amount.”

The Whistler
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