Continuous stakeholder engagements in the agricultural sector involving financiers, pooled communities, commercial outfits, individual farmers, technical partners, non-governmental organisation and research institutions would ensure effective and sustained funding for the sector, Group Managing Director/Chief Executive Officer of First Bank of Nigeria Ltd, Mr. Bisi Onasanya has said.
Onasanya made the above submission during a panel session at the on-going 19th Nigerian Economic Summit Group conference in Abuja. President Goodluck Jonathan told participants including leading government functionaries, captains of the private sector, academics, local and foreign investors that the nation is emphasising on building institutions for enduring and sustainable developmental policies in the Agricultural sector. The President also launched the Youth Employment in Agriculture Programme (YEAP) to attract young Nigerians to the sector.
Minister for Agriculture, Dr. Akinwunmi Adesina said the sector had during the current financial year received N25 billion as loans from banks, a development that underscores the importance of the financial sector in driving the growth and development of agriculture in Nigeria.
Sharing insights on the theme “Growing Agriculture as a Business to Diversify Nigeria’s economy” at the on-going Nigeria Economic Summit Group (NESG) forum in Abuja, Onasanya said: “the need for industry operators and policy makers to improve the understanding of the sector’s financing needs will facilitate effective funding for the sector.
According to him, the sector needs a deepening of the market of financiers to include other sources of long term finance like venture capital, private equity funds and the capital markets. “There is an urgent need to clearly identify the parties that would be most ideal in managing the risks in the credit cycle especially as it pertains to value chain financing,” he said.
Onasanya canvassed the application of technology in farming and in the extension of credit products to the agricultural community adding that the development of structured products and complementary insurance covers will help identify, mitigate and allocate risks to relevant managers. He added that leveraging on the benefits of technology would reduce administrative costs and hasten the disbursement of funds to a large number of beneficiaries across the country.
Noting that the advent of credit bureaus if well integrated to the credit cycle would be invaluable as a key tool that can be deployed to mitigate risks; he urged banks and financial institutions to incentivize to fund agric business sustainably through risk sharing, risk profiling and management skills. “Risks are either to be avoided, diversified, mastered and or managed,” he added.
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