As part of its efforts to support the diversification plans of the federal government, Ecobank Nigeria Limited has explored partnership across the globe for the provision of cheaper lines of credit to players in the country’s agricultural industry.
Already, the lender has joined forces with the Nigeria Incentive-based Risk-Sharing System for Agricultural Lending (NIRSAL), United States Agency for International Development (USAID), Development Bank of Nigeria (DBN) and other developmental partners to double the amount of credit it provides to farmers over the next two/three years.
A statement issued by the financial institution said some of the partners will be providing guarantee on loans granted by Ecobank to Nigerian farmers and processors.
According to the head of Agric Business Department of Ecobank Nigeria, Ms Mojisola Oguntoyinbo, “Separately, we are exploring partnership across the globe to support cheaper lines of credit to players in the industry through export credit agencies.”
She also said Ecobank plans to increase loan portfolio to the agricultural sector by N70 billion within the next two to three years, adding that there are plans to hold an agribusiness summit next month themed Unlocking Productivity and Investment opportunities across Nigeria’s Agribusiness Value Chain.
According to her, the summit will target all players in all value-chain of the sector (input suppliers, crop and livestock producers, processors, commodity exporters etc).
Banks in Africa’s biggest oil producer are increasing lending to the agricultural industry amid a push by President Muhammadu Buhari’s government to diversify the economy away from crude.
The Central Bank of Nigeria (CBN) has regulated banks to maintain a minimum loan-to-deposit ratio of 65 percent or face penalties, while supporting the government’s drive to produce more food locally and curb imports.
While Ecobank has a loan-to-deposit ratio of more than 65 percent in Nigeria, it is targeting agriculture to boost its “return on investment,” according to Ms Oguntoyinbo.
She said, “Small and medium enterprises are growing rapidly in the agricultural sector and there are opportunities there, which we desire to nurture for growth and development.”