‘Why Farmers Cannot Access Bank Loans’

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Alhaji Sani Bala Tanko retired in 2012 as Group Head in charge of public sector in First Bank of Nigeria and went straight into farming.

In this interview at his farm in Tilden Fulani, Bauchi State, the ex-banker said the Federal Government must look into processes of obtaining loans by farmers and also allay their fears by not giving licences for importation of grains that could be produced locally. Excerpts:

Most workers, from both the public and private sectors, find life difficult after retirement. How did you plan for your retirement?

Well, when I was in service, we always discussed with my second child who is now in Malaysia. He has passion for farming, so he was encouraging me to get land for farming; but then I was not very much interested because of the nature of the bank job, but I was able to get sufficient land that I can use after retirement.

Was it after you retired that you faced farming seriously?
No, before retirement, that same child encouraged me to start so that I can have a smooth transit, especially during my terminal period. I utilized it in setting up the farm; I learnt a lot of things about farming.

What kind of farming are you into?
I am into integrated farming, in my farm, we rear cows, produce cash crops as well as engage in fish farming and animal husbandry.

Some people say farming is very difficult, how true is that?
Yes, it is. If you don’t have sufficient capital you cannot farm. The fact is that a lot of things have been said that government at various levels are assisting farmers; but you wonder how they are assisting the farmers. Perhaps, it’s at the top or they sort of encourage the rich farmers at the detriment of the upcoming farmers. The average farmer does not even know what the facility or the loan from the bank is all about.

The Bank of Agriculture has released billions of naira for farming, why are farmers like you not taking advantage of that?
Well, if I can work for 35 years in the banking sector, I know what it takes to get loan because I was at a time in the position to approve loan. And if you are talking of Bank of Agriculture or Bank of Industry, it should be a different paradigm from a commercial bank.

How can you say Bank of Agric will charge you two digit interest rate and above the commercial or at par with the commercial bank?
And then if you talk about collateral, they request for the same as commercial banks, how does that work? It doesn’t work; in fact it doesn’t help anybody.

What then is the essence of going to Bank of Agriculture when they would ask you to bring state government certificate of occupancy of your land as collateral?
And then they ask for the same legal fees as you pay in commercial banks.
Another problem is that when you go to some of the financial institutions designed to promote agriculture, they have specific people that they appointed to do what we call business plan or feasibility, you cannot do it yourself and definitely you know that something is really missing; there is a link that is missing.

Where is the missing link?
Yes, the Federal Government has good intentions, especially the President. But most people handling the affairs, including the financial aspect are novices. People from failed banks have been recruited into the system who only offer lip service. If you go in-depth in it, you will discover that nothing is happening. Most of them don’t know the credit analysis, they don’t know how they would simplify the long process of getting the facility, they make things very difficult but on the papers and radio, it looks so easy.

What do you think should be done so that farmers can have access to these loans?
The other day I went to the headquarters of Bank for Agriculture in a nearby state and I met the manager. I never gave the manager the impression that I was a former banker, and I asked for the requirement, the procedure and what she said was the same thing with the commercial banks and they cannot give you facility of more than N5 million as small SME and then the same procedure of security or collateral as you will use in the commercial bank is the same procedure that you will use in the agric bank.

What is the easiness there?
The fact is that a lot of good policies have been made but implementation remains problematic. But there are facilities at the Central Bank that do not require stringent collateral and many farmers are taking advantage of that.
In cooperative banks, there is a certain amount of money that they give to you like for women associations and so on and so forth; but we are talking of SME (Small and Medium Enterprises); from five million to 10 million and you are asking people to bring state government C of O instead of local government C of O.

With these troubles, are you happy being a farmer?
Well, I am very happy because I derive pleasure in the job; but not that anybody is helping. We would have done better. You have seen my farm and I am sure that you are impressed with the maize we have planted. We are optimistic the yield would be very high; the rice and so on but all of a sudden, we heard the same government that is telling us to farm is now giving some companies licence to bring in maize. And by the time they bring in maize, perhaps they may sell it at a lower price, meaning all the investments that you have made have gone bad.
So the Federal Government must do something, what they preach they should stand by it. I read in the papers that the Minister of Agriculture was denying that he has no knowledge of any licence given out.

Are you optimistic that if the borders remain closed farmers would be able to produce more crops for both commercial and domestic purposes in Nigeria?
Yes, I am very optimistic but the issue is not all about closing the borders. What comes through the borders is not much but when people are given licenses, like companies to import, it means it is a form of sabotage to the Federal Government’s effort and by implication to the President.
We have all come out to answer the president’s call to participate in farming; we are all doing it wholeheartedly but along the line, some people are sabotaging the whole effort. Something drastic must be done.