Nigeria’s money deposit bank credit to farmers in the country has declined by N54.8 billion from N556.5 billion in q1 2017 to N501.7 billion q1 2018, showing a 10 percent year-on-year decrease, data from the National Bureau of Statistics (NBS) banking report states.
On a quarter on quarter basis, loan from the banking sector to farmers decreased by five percent from N528 billion in q4 2017 to N501.7 billion in q1 2018, according to the NBS report.
Despite the country’s agricultural sector attracting more investments in recent years, owing to the renewed commitment of the government and new entrance of farmers into the sector, Nigeria’s money deposit bank credit to the sector has declined.
Industry players who spoke to BusinessDay stated that the percentage year-on-year decrease is not a welcome development, saying that farmers need finance to expand their production areas and boosting productivity.
“We need cheap credit to grow our agriculture. Farmers need quality seeds, technology and the capacity to improve their productivity and all these requires finance and will help farmers drive down their production cost,” Tola Faseru, national president, National Cashew Association of Nigeria (NCAN) said.
“This will make our agricultural commodities competitive in terms of pricing,” Faseru said.
He urged the banking sector to increase its loan to the agric sector to help spur growth as lack of finance has continued to limit the potentials in the sector.
According to the NBS report, the sector accounted for 3.2 percent of all the banking sector total credit for the period.
“Lack of finance and high interest rate has been a major challenge limiting youths from venturing into agriculture. We would get nowhere with agriculture if we fail to address the issues of credit, access to technology and land acquisition,” Audu Ogbeh, Minister of Agriculture said during the BusinessDay Agribusiness conference.
“We are pushing for agricultural lending rates to be five percent,” Ogbeh said.