Over the past few months Sterling Bank seems to have been striking all the right notes especially on social media. This time it’s digging its hands deep into the soil. The bank has announced that it is dedicating 10% of its loan portfolio to financing agriculture in Nigeria.
Agriculture remains a major source of revenue and livelihood in the country. In recent times many corporate organizations have extended their support through financial aid schemes aimed at helping scale farmers especially and helping improve food security in the country. Startups such as Farmcrowdy have also sprouted and done a lot in improving agriculture in the country.
Mrs Bukola Awosanya, the bank’s Group Head of Agriculture Finance and Solid Minerals disclosed this at a recent summit on Commodity Value-Chain Investment and Agribusinesses Support Initiative.
She also took the opportunity to highlight some of the major obstacles to provision of agriculture loans.
“We want to encourage farmers but if the input is bad, the output will fall short of expectations. For instance, poor seed quality is an issue; lack of infrastructure such as bad roads is also an issue because it makes distribution of the harvest from the farm to the market difficult.
“Government policy also affects lending to the sector because after the bank has concluded arrangements to finance some farmers, the government may decide to lift a ban on the importation of the commodity. What happens to the ones you have done? So government policy is also a problem in agriculture.”
Lack of loan repayment on the part of farmers is also one of the major reasons banks aren’t highly motivated about giving out loans.