Nigeria’s money deposit bank credit to farmers has hit N2.1 trillion owing to the renewed commitment to the sector by the financial operators in the country.
On a year on year basis, the credit increased marginally by 11 percent from N1.9 trillion in 2016 to N2.1 trillion in 2017, data from the National Bureau of Statistics (NBS) show.
Despite loans to the sector decreasing marginally in q3, there was an increase in q4 from N492 billion to N528 billion.
Key industry players who spoke to BusinessDay stated that the increase is a welcome development, adding that a lot still needs to be done on ensuring that the interest rates are single digit.
“It should improve in the sense that government wants to focus on agriculture and if you want to focus on agriculture there is no way you will not give assistance to farmers in terms of credits or inputs, so I feel we may notice some few things that are not good but that does not mean that the funds will not improve”, Henry Akintoye, president, Horticultural Society of Nigeria said in a response to questions.
Banks credits to the agricultural sector are showing a positive outlook, as more improvements in credits are expected to come.
Farmers need the loans in order to venture into mechanized farming to increased food production and food security to meet up with the increasing demand from the rising population, stakeholders say.
“In the United Kingdom interest rate is 5 percent but in Nigeria the interest rate is close to 20 percent. It is only of recent that the ministry of agriculture said that loans should be at 9 per cent which is yet to be effective, it is still between 12 and 13 percent. S o you cannot compare what we produce with 13 per cent interest rate with that of someone producing at 5 percent”, Tunji Ademola, former national president, Maize Association of Nigeria (MAAN).