Sterling Bank Plc has notified the general public that it dedicated 10% of its overall loan portfolio to help finance the country’s agricultural sector. According to the lender, this is being done in recognition of the fact that the sector is one of the major contributors to the growth of the nation’s economy.
The bank’s Group Head of Agriculture Finance and Solid Minerals, Mrs Bukola Awosanya, disclosed this at a recent summit on Commodity Value-Chain Investment and Agribusinesses Support Initiative through Public and Private Partnership (PPP).
She disclosed that the bank’s dedication to the sector was a premeditated intention to help farmers and ensure that the value chain is properly tied end to end.
Reasons for delayed intervention: According to Mrs Awosanya, most lenders have been reluctant to provide credit facilities for the company because of the following;
- The absence of good agricultural practices.
- Farmers’ inability to meet up to loan agreements.
- Bad weather.
“We want to encourage farmers but if the input is bad, the output will fall short of expectations. For instance, poor seed quality is an issue; lack of infrastructure such as bad roads is also an issue because it makes distribution of the harvest from the farm to the market difficult.
“Government policy also affects lending to the sector because after the bank has concluded arrangements to finance some farmers, the government may decide to lift a ban on the importation of the commodity. What happens to the ones you have done? So government policy is also a problem in agriculture.” -Awosanya
Farmers’ Access to Loans: She also spoke about the need for farmers to be educated on the importance of paying bank loans, because if loans are not repaid, banks will not be motivated to give them loans again.
In the meantime, Sterling Bank Plc intends to support the health, education, renewal energy and transport sectors.