The federal government of Nigeria through its initiative; International Fund Agricultural Development, IFAD, Value Chain Development Programme, VCDP has signed an agreement with First City Monument Bank (FCMB), LAPO Micro Finance Bank and Development Exchange Centre (DEC) to facilitate accessibility to credit for smallholder farmers.
According to the News Agency of Nigeria, the deal with the three financial institutions will help to ensure timely access to credit by farmers and agricultural sustainability.
The MoU which is billed for six years starting from December would also likely provide technical and financial supports to rural farmers.
Identifying timely access to finances by rural farmers as a major challenge impeding their agricultural activities and resulting in low food production, Garba Bala, the National Programme Coordinator IFAD/VCDP noted that collaboration with financial institutions is one of the basic requirements of the programme to assist farmers in accessing financial support and services at a very low-interest rate.
He said, “The idea behind the partnership is to ensure sustainability of the programme because every donor funded programme has a time limit. At the moment, the programme is assisting farmers in several aspect of implementation. By the time we get financial institutions support that will enable farmers access very low interest rate and by the time the programme exit, they will be some reasonable level of independent.
“The signing of the MoU between VCDP and the three financial institutions is about collaboration and technical support, most importantly financial support from the institutions to our rural farmers being the direct beneficiaries of the programme. We are looking forward to a situation where farmers will access financial support in terms of loan at low interest rates from these financial institutions.’’
Bala also charged financial institutions to release timely funds to targeted farmers and give them the lowest interest rate regardless of their drive to maximize profit. He said, “whenever farmers apply for loan these facilities, it should be given to them promptly at the required time for effective and purposeful utilisation of such loan not after the farming season because such money will be useless.”
Addressing farmers as well, he said, “Farmers should utilise this opportunity which is a very good one. If they can access this facility in the next few years, they will be on their own without having to look for any additional loan to sustain their farming activities.’’
Iliya Sambo, Executive Director, DEC described the development as one that would ensure sustainability of the programme and Mustapha Lukeman, the Divisional Head, Commercial and Business Banking, FCMB expressed excitement to participate in the agreement geared towards agricultural development in the country.
Similarly, Obehi Anene, the Area Manager, LAPO MFB emphasized that the development would enable farmers access to fund to meet their input demand with loan repayment after harvest.
The Value Chain Development Programme (VCDP) is a six-year development initiative of the Federal Government of Nigeria (FGN) and International Fund for Agricultural Development (IFAD) programme focused on improving cassava and rice value chains for small farmers in states like Anambra, Benue, Ebonyi, Niger, Ogun and Taraba and also addressing the constraints along the value chains.