Keystone Bank Limited has boosted the Central Bank of Nigeria (CBN) Anchor Borrowers Programme with N350 million credit line covering 1700 farmers starting with Taraba and Sokoto States.
Managing Director of Keystone Bank, Mr. Philip Ikeazor, who disclosed this in Lagos, underscored the importance of financial institutions in driving the agricultural sector.
He said: “Financial institutions have a crucial role to play in providing support to players along the agriculture value chain and the Central Bank of Nigeria’s (CBN’s) initiative of the Anchor borrowers programme is a step in the right direction. Financing in agriculture is one factor of production, which facilitates the acquisition, procurement and management of the other factors of production such as land, expertise and management.”
According to experts in the agricultural sector, the low volume of business in the rural areas where poverty is most prevalent cannot guarantee sustainable business activities to encourage the establishment of commercial banks to provide the needed finance for agricultural production. Moreover, the cost implication of processing agricultural loans in the rural economy makes it unattractive for conventional banks to channel their resources to farming. Although, the commercial banks finance agricultural activities but their credits are urban-based and so small that their impact cannot be felt in the rural areas where farming actually takes place. Lack of priority attention to rural population in credit delivery by commercial and other banks in the economy contributed to the depressed economic conditions in the rural economy, and this situation also affects the overall economic growth and development of the nation.
With the current focus of the Federal government on diversification of the economy, Agriculture is being promoted in many quarters as the next frontier in driving the economy of the nation.
The Anchor Borrowers’ Programme, which was initiated by the CBN as a sub-shoot of the Micro, Small and Medium Enterprises Development Fund (MSMEDF) was created to support farmers and increase their production capacity. About N19 billion was disbursed in the last farming season with reported 90 per cent success rate. The programme was initially designed for rice farmers only but the scope has since been expanded to other farming sectors.