This was the outcome of a retreat organised by NIRSAL for chief risks officers of banks, the CBN and other stakeholders in the financial sector.
Present at the event were the Deputy Governor, Financial System Stability, Mrs Aisha Ahmad; the Managing Director, Union Bank Plc, Mr Emeka Emuwa; and the Managing Director of Ecobank, Mr Patrick Akinwuntan.
The other banks represented at the event were Guaranty Trust Bank, Keystone Bank, First City Monument Bank, First Bank, Unity Bank, Diamond Bank, Access Bank, Heritage Bank, and Sterling Bank.
The decision to increase lending to the agricultural sector was underscored by the fact that overall bank lending to the sector had hovered between three per cent and four per cent over the past eight years.
A statement from NIRSAL on Sunday quoted its Managing Director, Mr Aliyu Abdulhameed, to have stated that agriculture deserves more support because of its capacity to generate jobs and contribute to the country’s Gross Domestic Product.
He said, “NIRSAL is rightly positioned through our intervention pillars to effectively de-risk the sector and promote viable agricultural businesses.
“The focus of brainstorming at the forum, which NIRSAL hosted in collaboration with the Central Bank of Nigeria, was to better understand and overcome the obstacles that prevent commercial banks from lending to agri-businesses and Micro, Small and Medium-scale Enterprises from their balance sheets.”
The statement said that it was noticed at the forum that up to 79 per cent of rejected applications for agric funding were due to improper documentation.
It added that stakeholders at the retreat agreed that there was the need to enhance capacity building towards changing the perception of agribusiness from that of a high-risk sector.