The federal government has partnered with Mastercard to support 1million farmers across the continent through financial inclusion and contactless payment.
This was announced by the Vice President, Sen. Kashim Shettima after a meeting with Executives of Mastercard on the sidelines of the 79th United Nations General Assembly (UNGA) meeting in New York.
The project plan aims to support one million agricultural workers across Nigeria, Kenya, and Tanzania, focusing on improving financial inclusion and providing digital access to essential services, with backing from the African Development Bank.
During the meeting, the Vice President, representing President Tinubu at the annual global event, highlighted the initiative’s transformative potential for advancing Africa’s food security efforts.
He said, “This partnership is an important milestone in our quest for comprehensive financial inclusion and agricultural empowerment.”
What you should know
Farmers and those in rural communities across Africa remain excluded from the financial system which prevents them from accessing finance to scale their operations. According to a report by the National Bureau of Statistics, (NBS) only 7% of farming communities received micro-credits from banks in 2022.
- The report further revealed that only 11% of agricultural communities had access to bank loans, with many communities across the country reporting even lower figures. Additionally, the survey found that credit facilities from cooperative organizations were more commonly accessed than bank loans, with about 24% of interviewed communities reporting the availability of credit through cooperatives.
- Contactless payments through mobile devices and other fintech platforms have proven to be a game changer in drawing more people even in remote regions into the financial system. This would improve access to credit facilities which have long plagued the agricultural sector.
- In 2023, out of the N44.54 trillion in loans extended by banks to the private sector, only N2.26 trillion, or 5.07%, was allocated to the agricultural sector, despite its contribution of over 20% to GDP.
- Moreover, commercial bank loans to agriculture were the lowest among the top ten sectors of the Nigerian economy, according to the Central Bank of Nigeria’s (CBN) year-end report.
- The administration of President Bola Tinubu although has stopped development financing executed by the Central Bank of Nigeria (CBN) but has committed to reforming the bank of industry, bank of agriculture and Nigeria Incentive-Based Risk Sharing for Agricultural System (NISRAL) bank to ensure they fill the vacuum left by the apex bank.
