They hinged the call on the layers of hurdles that unsophisticated farmers are made to go through while applying for loans as individuals or cooperatives.

Though the Central Bank of Nigeria (CBN) recently announced a new financing regime of single digit interest rates to farmers, agro-industrialists and processors, the processes and requirements appear cumbersome.

Olumide Ayinla, Oyo State chairman of the All Farmers Association of Nigeria (AFAN), while speaking with The Guardian, lamented that it was not easy to access the loans of the Central Bank of Nigeria (CBN) and the Anchor Borrowers’ scheme. He added that if farmers were lucky to scale through the hurdles, the loans were often either withheld for frivolous reasons or released at eleventh hour when cultivation would be practically impossible.

The cost of processing the loan is, most of the times, high for poor farmers, he argued, apart from stringent requirements that push off most smallholder farmers. He, however, added that he was not calling for removal of due diligence, saying necessary verifications, financial history and sincerity of farmers should be taken into consideration while processing loans.

Olumide emphasised that timing of loans to farmers is crucial, considering that most cultivations are rain-fed, calling on the federal and the state governments to revive and expand irrigation facilities in the country.

Chief Executive Officer/Country Manager of Dizengoff Nigeria, Mr Antti Ritvonen, also suggested that the government should do more in finance schemes and simplify the process of loan applications and review requirements, saying the existing processes and requirements were counter-productive to the goal of diversifying the economy.

He argued that, for a farmer who does not have lawyers or financial managers working with him, the processes and requirements appeared too cumbersome and unnecessarily bureaucratic, saying, “the government should make financing easier and simpler for farmers to access.”

Bringing experience from agric micro credits and risk management, Head of Agric and Micro Insurance/National Coordinator, Leadway Assurance Company, Mr Fatona Ayoola, while also admitting the complexity of agric financing schemes, advised that the agencies in charge of such facilities need to provide innovative credit schemes that address the problems of small scale farmers who lack collateral and that policy measures for improving access to credit should be developed based on farmers’ preferences and needs.

Fatona emphasized that there should be institution capacity building for both lenders and borrowers, and this should be an integral part of every credit programme.

Agricultural activities are time bound and based on this fact, the facility approved should be disbursed on time, in line with the agronomic activities of the farmer and to ensure that it is utilised for the right activities, he suggested.

Farmers should be involved and actively participate in the planning of agricultural credit schemes by these institutions.
Fatona also suggested that there should be an establishment of more specialised agricultural micro credit institutions at the rural areas to make credit more accessible to farmers.

This supports the view expressed by the Managing Director of Oluji Cocoa Products Ltd in Ile-Oluji, Ondo state, Mr Akin Olusuyi, who argued that the location and structures of the Bank of Agriculture (BOA) could not make it accessible to farmers in the rural areas, where farming activities predominantly take place.

Olusuyi, who deals directly with rural cocoa farmers in Ile-Oluji/Oke-Igbo local government area of Ondo state and its environs, advocated restructuring of the agro-industrial financial institutions to make them relevant to the present realities, calling for sincere moves to diversify the economy, reduce poverty and create wealth through the agro-allied industries.

The consensus of most of the industry players are that farmers should be trained and educated about the processes involved during the application for credits, and the procedures re-structured and simplified; that the bureaucracy be removed and the processes synchronised.

Assisting and training the farmers in the development of feasible and sustainable business plans and projections to ensure that the best lending solution is provided for the long term benefit to the farming enterprise was also recommended by the Leadway Assurance expert.

“The loan application process should be made as simple as possible with less cumbersome documentations,” Fatona recommended.

Mr Akin Agboola, President of the Hope Concept Cooperative Union, has also revealed the ordeals experienced through the Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending (NIRSAL) Plc, a de-risk agent of the government under the Central Bank of Nigeria.

The Central Bank of Nigeria (CBN) had released about N298 million to NIRSAL since July 19, 2018 and it had been delaying the release of the funds to the concerned farmers on the guise of further verification, training and recently, cost evaluation, as the dry season sets in.

The cooperative has postponed the cultivation till the 2019 rainy season, while missing the opportunity of adding to grow the national gross domestic product (GDP).

Source: The Guardian