MARKET DEVELOPMENT
Sterling Bank to Dedicate 7% of Loans to Agric Financing
Sterling Bank to Dedicate 7% of Loans to Agric Financing
27/06/2014 (BusinessDay) - Sterling Bank plc has restated its commitment to the strategic growth of the agricultural sector by providing adequate funding in alignment with the ongoing reforms in the sector aimed at repositioning it as an attractive business proposition, an input provider for the manufacturing sector and a key foreign exchange earner.
Bukola Awosanya, the bank’s group head, agriculture finance, disclosed that the bank had devoted 5 percent of its loan portfolio to the sector for the current financial year, adding that this will be increased to 7 percent by year end.
Awosanya, who stated this while receiving the leadership of the National Groundnut Producers, Processors and Marketers Association of Nigeria at the bank’s head office in Lagos, assured that the bank will continue to provide the much needed financial support to all stakeholders in the value chain to ensure the revival of the sector in the country.
“At the moment, we had utilised 3.5 percent out of the 5 percent budgeted for the sector this year. We also have plans to increase this to about 7 percent by year end. We leverage on the various Central Bank of Nigeria schemes and our bank’s funds for lending to the sector. The bank had also been in the forefront of the Growth Enhancement Scheme (GES) initiated by the government since inception and has been actively involved in financing Agro dealers under the scheme,” she restated.
Awosanya also said at the meeting that the bank was also involved in the financing of one of the largest rice mills in Nigeria, a state-of-the-art soya bean oil milling plant, poultry which is regarded as a high risk business venture and also provides advisory services to operators in the business.
She expressed her optimism that the Agricultural Transformation Agenda will make Nigeria an agriculturally industrialised economy in the medium to long term especially as the efforts of the government has attracted new investors and unprecedented foreign direct investment to the sector.
She stressed further: “Agriculture was the main source of the country’s foreign earnings before the discovery of oil. At that time, Nigeria was the leading exporter of groundnut, cocoa, groundnuts, palm oil and cotton to mention a few. Prior to the recent rebasing of the economy, agriculture was one of the largest contributors to the country’s Gross Domestic Product GDP and provided 60 percent of employment opportunities in the country. The major problem with the sector came after oil was discovered as successive governments shifted their focus from agriculture to oil. This led to the near collapse of the sector. This was the situation with the sector until the present government came up with the transformation agenda to reposition the sector to drive Nigeria’s economy. Through the various items under the agenda, a lot has been done to bring back the lost glory of the sector”.
She specifically commended the introduction of the GES which had led to the deregulation of fertiliser sales and distribution to farmers. “One major part of the transformation agenda is the deregulation of fertiliser distribution. With the introduction of the scheme, fertiliser is sold directly to farmers through the Agro dealers. This has eliminated governments’ involvement in the direct sale of fertiliser and has led to a lot of improvements in the sector as farmers now buy fertiliser directly from designated Agro dealers at a subsidised price in their localities”.
In his remarks, the President of the Association, Aimu Foni commended the bank for its support to the Agriculture sector adding that the Association was willing to partner with the Bank to support farmers in the production, processing and marketing of groundnut in the country.
Bukola Awosanya, the bank’s group head, agriculture finance, disclosed that the bank had devoted 5 percent of its loan portfolio to the sector for the current financial year, adding that this will be increased to 7 percent by year end.
Awosanya, who stated this while receiving the leadership of the National Groundnut Producers, Processors and Marketers Association of Nigeria at the bank’s head office in Lagos, assured that the bank will continue to provide the much needed financial support to all stakeholders in the value chain to ensure the revival of the sector in the country.
“At the moment, we had utilised 3.5 percent out of the 5 percent budgeted for the sector this year. We also have plans to increase this to about 7 percent by year end. We leverage on the various Central Bank of Nigeria schemes and our bank’s funds for lending to the sector. The bank had also been in the forefront of the Growth Enhancement Scheme (GES) initiated by the government since inception and has been actively involved in financing Agro dealers under the scheme,” she restated.
Awosanya also said at the meeting that the bank was also involved in the financing of one of the largest rice mills in Nigeria, a state-of-the-art soya bean oil milling plant, poultry which is regarded as a high risk business venture and also provides advisory services to operators in the business.
She expressed her optimism that the Agricultural Transformation Agenda will make Nigeria an agriculturally industrialised economy in the medium to long term especially as the efforts of the government has attracted new investors and unprecedented foreign direct investment to the sector.
She stressed further: “Agriculture was the main source of the country’s foreign earnings before the discovery of oil. At that time, Nigeria was the leading exporter of groundnut, cocoa, groundnuts, palm oil and cotton to mention a few. Prior to the recent rebasing of the economy, agriculture was one of the largest contributors to the country’s Gross Domestic Product GDP and provided 60 percent of employment opportunities in the country. The major problem with the sector came after oil was discovered as successive governments shifted their focus from agriculture to oil. This led to the near collapse of the sector. This was the situation with the sector until the present government came up with the transformation agenda to reposition the sector to drive Nigeria’s economy. Through the various items under the agenda, a lot has been done to bring back the lost glory of the sector”.
She specifically commended the introduction of the GES which had led to the deregulation of fertiliser sales and distribution to farmers. “One major part of the transformation agenda is the deregulation of fertiliser distribution. With the introduction of the scheme, fertiliser is sold directly to farmers through the Agro dealers. This has eliminated governments’ involvement in the direct sale of fertiliser and has led to a lot of improvements in the sector as farmers now buy fertiliser directly from designated Agro dealers at a subsidised price in their localities”.
In his remarks, the President of the Association, Aimu Foni commended the bank for its support to the Agriculture sector adding that the Association was willing to partner with the Bank to support farmers in the production, processing and marketing of groundnut in the country.