08/08/2011 (Vanguard) - Union Bank has established a reputation of rendering reliable banking support services to all categories of farmers.

This is reflected in the bank’s participation in the Commercial Agricultural Credit Scheme (CASC) where the bank has supported 18 commercial agricultural projects with N17.25 billion.

This funding support was used for expansion of poultry production, infrastructure development, feed milling, and increased egg production.

It was also used for dam construction, irrigation and water supply; teak plantation establishment; cotton production/cultivation, processing, marketing and export; arable crop production e.g grains.

The funds also facilitated seed production, agro inputs like fertilizer importation, orchard establishment and fruit juice processing.

Consequently, the bank has helped these commercial farmers to increase production capacity, output and generate more employment for the country and thus facilitate the fulfilment of the objectives of the scheme.

Prior to the CACS, Union Bank had consistently supported government’s agricultural programmes designed to boost lending to farmers. Notable among them is the Agricultural Credit Guaranty Scheme Fund established in 1977.

Union bank’s active participation in the ACGF since its inception in 1977 is attested to by the numerous awards won in federal and state competitions by its clients and those won by the bank itself.

The bank won the Best Performing Bank Award under ACGF from 1993 – 2004. In 2004, the State Farmer of the Year Award for 28 states went to farmers borrowing from Union Bank. Also, the National Farmer of the Year Award for 2004 was won by one of its customers.

The bank also participated in the Agric Credit Support Scheme (ACSS), an initiative of the Federal Government and the Central Bank of Nigeria to enable farmers exploit the untapped potentials of Nigeria’s agricultural sector, reduce inflation, lower the cost of agricultural production (i. e. food items), generate surplus for export, increase Nigeria’s foreign earnings as well as diversify its revenue base.

Under the scheme, Union Bank disbursed the sum of N0.25 billion while the Corporate Banking Group (CBG) agro-allied has disbursed the sum of N1.650 billion to various agro firms.

Also under the Trust Fund Model, an ACGSF-based initiative to boost lending to agricultural sector; the bank extended the sum of N1.065 billion to farmers.

Union Bank’s support for the agricultural sector is driven and executed by a full-fledged agricultural department established three decades ago. In addition, it employs graduates of agriculture and agric economics to appraise, monitor and supervise agricultural projects across the nation.

Aside from participating in executing all government agric financing schemes, Union Bank has creatively fashioned its own indigenous ways of helping farmers every farming season.

In 1988, the bank formulated two agricultural product types, namely: the global limit and non-global limit. The global limit is a scheme for micro credit farmers. It is the lending window for projects that require a maximum loan amount of N1,000,000 (one million naira only).

This is a seasonal facility and loan tenure is a maximum of 10-12 months only. It is usually given for the production of seasonal crops and small scale livestock production.

Global Limit has persisted as the bank’s flagship product, the main lending window to small scale farmers who are engaged in On- Farm and Off-Farm activities like mini agro processing and marketing of farm produce during the dry season. Through this product, Union Bank supports farmers engaged in Fadama farming.

On the other hand, the non- global Limit is a lending window for projects that require more than N1million. Amounts vary from above one million to several millions. Loan tenure depends on the gestation period of the project.

The loan schemes accommodate various categories of customers who must have been in production for a minimum of six months namely, individuals, enterprises, private limited liability companies; farmers’ groups, cooperatives and unions that are duly registered.

Besides, this can be granted to such projects as establishment or management of plantations for the production of rubber, oil palm, cocoa, coffee, banana, plantain; production of all types of Cereal crops, tubers, fruits of all kinds – orchard, cotton, beans groundnut, ginger, shea nuts, beniseed, assorted vegetables, pineapples etc.

Others are livestock production including cattle fattening and ranch establishment, piggery, poultry, fishery/aquaculture, fish capture and storage facilities; integrated projects incorporating production and processing as well as produce purchase e.g. cotton, groundnut, cocoa, oil palm, coffee, rubber etc.

For instance, the bank disburses a minimum of N10 billion under the global limit every year. In 2010, the Osibodu- led management set aside N10 billion and another N10 billion for the current year for global limit. As at March 31, 2011, the bank has disbursed the sum of N3.04 billion to farmers. Under the non-global limit for medium scale enterprises, the bank has also disbursed N3.563 billion.

Prior to August 2009, Union Bank had spent over N25 billion under the agric credit guarantee scheme fund to finance small farmers,making it N45 billion so far extended to small scale credit. The bank has also committed the sum of N38 billion to large scale commercial farming and agro processing.

The cumulative funds extended to various agricultural groups are over N83billion to date. Thus the bank has helped to develop the agricultural sector and proved that lending to agriculture is profitable.

To date the bank has won several awards and accolades for its exploits in the development of agriculture and the nation’s economy. Sequel to the global limit scheme, Union bank was acclaimed by the World Bank and the African Rural Agricultural Credit Association (AFRACA).

Also, the Association of Nigerian Development Finance Institutions in 2006 declared Union bank the Best Bank in agric financing.

It was in furtherance of this pivotal and pioneering role that Union Bank organized the recent International conference to address the challenges of agric financing in the Sub Saharan Africa (SSA).

In her welcome address, the Group Managing Director and Chief Executive, Union Bank of Nigeria Plc, Mrs. Funke Osibodu said the conference was packaged in appreciation of the importance of Agriculture to the economies of the Sub-Saharan Africa (SSA).

Agriculture, she argued, accounts for an average of 30 percent of Gross Domestic Product (GDP) and 40 percent of exports of the region, it also provides employment for about 60 percent of the population.

Therefore any strategy that is intended to promote rapid economic growth and reduce poverty in SSA , she contended, must be centre on the agricultural sector.

“For Agriculture to act as engine of growth and serve as poverty alleviation tool in SSA, it is necessary to address the key challenges facing the sector which inhibit its growth. Primary among these factors is the access to funding/investment to achieve and appreciable level required for the sector “.

On the part of banks and financial institution, she admitted that there was a high level reluctance to lending to agriculture because of high risks arising from the environment, price, and production deterioration, among others. .

Accordingly, she averred that the conference provides an opportunity for participants to brainstorm and identify existing challenges across the Agricultural value chain and how best to resolve the issues through value chain financing.

Established in 1917 Union Bank is one of the oldest and biggest bank in Nigeria with 379 branches across the country, all of which are on-line real time. As at December 31, 2010 the bank’s gross earnings was N113.961 billion; profit after tax was N118.016 billion and total assets was N845.231 billion

The bank entered a new phase in its history in 2009 with the appointment of Mrs Funke Osibodu as Group Managing Director/Chief Executive with a mandate to reposition the bank. For this purpose, the Osibodu- led management unfolded a rebirth agenda for the bank which focuses on risk management and control, marketing, business development and people management.