Prof. Danbaba Danju, the Managing Director, Bank of Agriculture (BOA), has revealed the reasons why the bank is driving financial inclusion among Nigerian farmers.
The development financial institution recently adopted electronic methods to identify real farmers in Nigeria for facilitation of loans.
Indeed most Nigerian farmers especially in the small-holder category hope on the government to provide them with loans and grants for the procurement of farm inputs and payment of labour and services at single digit interest rates.
Access to available intervention funds however has been stifled by the non-record keeping attitude of many would-be beneficiaries, who desire to draw from the fund without a correlating plan of how the funds will be applied or paid back.
The fact that most of them live in the rural areas and are mostly illiterates has also discouraged them from opening bank accounts or using modern technological devices like the mobile phones.
However with the need to upscale production in agriculture, it has become pertinent to drive financial inclusion in the rural areas; this will enable rural small-holder farmers have access to funds and also ensure that the funds are well managed and repaid accordingly.
To this end, the BoA according to the MD has reached the stage where the bank was using the Bank Verification Number (BVN) and Global Positioning System (GPS) to verify identity claims of farmers before granting them loans.
Danju said that many people from all walks of life who claimed to be farmers had been granted loans and defaulted in repayment in the past.
He said the decision to explore such methods before granting loans to farmers was to act against fraud.
He said that the situation had made the bank to continue to go on debt collection drive.
“But now, we are trying to make sure that those who get loans are actually farmers.
“We are doing this through BVN where we can get the biometrics of people sourcing for loans and also the GPS to locate their farms.”
However one challenge which the bank is working towards getting past is that of spread. Despite having many branches in various locations in the country the bank is yet to scale up its operations to cover all 774 local government areas of the country.
Danju said that the bank was also providing micro loans and financing agro businesses, among other services.
Another factor that is critical to up scaling the bank’s intervention impact is the need to get youths more actively involved in farming.
According to Banju, the younger ones must be trained on every aspect of agriculture to boost the export of agricultural products through the establishment of more specialised universities of agriculture.
In Nigeria, youths are found in every nook and cranny of the country and most of them have basic primary education but rather than farm the youths prefer to move out to urban areas in search of services or retailing jobs which are not usually available.
This trend has further swelled the number of unemployed youths roaming the streets, while fertile farmlands continue to waste away.
Youths’ neglect of farming as a profitable profession is predominantly predicated on the picture of the use of crude implements by farmers resulting in low yields and profitability. This has reinforced the notion among youths growing up that farming is a low paying manual intensive profession.
Danju is however optimistic that the bank and educational institutions can help re-orientate the youths on the profitability of farming through mechanisation.
He said that the bank was exploring a system where youths could be organised for mechanised farming backed up with the bank’s facility.
This post first appeared HERE