Farmers, industrialists, and financial experts in the agribusiness industries have appealed to the federal government to simplify the processes and requirements for access to agricultural finance.
They responded to calls for layers of obstacles that inexperienced farmers face when going for loans as individuals or cooperatives.
Although the Central Bank of Nigeria (CBN) recently announced a new mode of financing unit interest rates for farmers, agribusinesses and processors, the processes and requirements seem cumbersome.
Olumid Ayinla, chairman of the Oai Association of All Farmers in Nigeria (AFAN) during a conversation with The Guardian, expressed regret that it was not easy to get access to loans from the Central Bank of Nigeria (CBN) and anchor borrowers. He added that if farmers are lucky that they will pass through obstacles, loans are often either held for reckless reasons or released at the eleventh hour, when cultivation will be almost impossible.
According to him, the cost of processing a loan is in most cases high for poor farmers, in addition to the stringent requirements that repel most small farmers. He added, however, that he did not call for the elimination of due diligence, stating that the processing of loans should take into account the necessary checks, financial history and the sincerity of farmers.
Olumid stressed that the timing of lending to farmers is crucial, given that most of the cultivation is fed by rain, urging federal and state governments to revive and expand irrigation facilities in the country.
The Chief Executive Officer / Country Manager of Dizengoff Nigeria, Mr. Antti Ritvonen, also suggested that the government do more in financing schemes and simplify the loan application process and review the requirements, saying that existing processes and requirements are counterproductive in order to diversify the economy.
He argued that for a farmer who does not have lawyers or financial managers working with him, the processes and requirements were too cumbersome and unnecessarily bureaucratic, stating: "The government should simplify and simplify financing for farmers."
Gaining experience with agricultural microcredit and risk management, Head of Agribusiness / Microinsurance / National Coordinator, Leadway Assurance Company, an insurance company, Mr. Fatona Ayola, also recognizing the complexity of agricultural financing schemes, must provide innovative lending schemes that affect the problems of small farmers who lack collateral, and that policy measures to improve access to credit should be developed atsya based on the preferences and needs of farmers.
Fatona stressed the need to build institutional capacity for both lenders and borrowers, and this should be an integral part of every credit program.
Agricultural activities are time constraints, and on the basis of this fact, an approved institution must be paid on time in accordance with the farmer’s agronomic activities and ensure its use for proper activities, he suggested.
Farmers should participate and actively participate in the planning of agricultural credit schemes by these institutions.
Fatona also proposed the creation of more specialized agricultural microcredit institutions in rural areas to make the loan more affordable for farmers.
This confirms the view expressed by the Managing Director of Oluji Cocoa Products Ltd in Ile-Oluji, Ondo, Mr. Akin Olusui, who argued that the location and structure of the Bank of Agriculture (BOA) cannot make it accessible to farmers in rural areas dominated by agricultural activities.
Olusuyi, who is directly involved in rural cocoa farmers in the local Ile-Oluji / Oka-Igbo state of Ondo and its environs, advocated restructuring agro-industrial financial institutions to make them relevant to current realities, calling for sincere diversification of the economy, reduce poverty and create wealth through agro-union branches.
The consensus of most industry players is that farmers should be educated and informed about the processes involved in applying for loans, as well as restructure and simplify procedures; that the bureaucracy must be removed, and the processes synchronized.
The Leadway Assurance expert also recommended assisting and training farmers in developing feasible and sustainable business plans and forecasts to ensure the best lending for long-term benefits for the farmer’s enterprise.
“The process of applying for a loan should be as simple as possible, with less cumbersome documentation,” recommended Fatona.
Mr. Akin Agbula, President of the Concept of Hope Cooperative Union, also unveiled trials tested through the Nigerian Risk Transfer for Agricultural Lending System (NIRSAL) Plc, a government risk reduction agent for the Central Bank of Nigeria,
The Central Bank of Nigeria (CBN) has released about N29S million NIRSAL since July 19, 2018, and it has postponed the allocation of funds to interested farmers under the guise of further testing, training, and recently cost estimates since the dry season.
The cooperative postponed cultivation until the rainy season in 2019, unable to add to the growth of the national gross domestic product (GDP).