The Federal Government and the International Funds for Agricultural Development Programme-Value Chain Development Programme (IFAD-VCDP) have signed an MoU with three financial institutions for timely access to credit by famers and agricultural sustainability.
The institutions are First City Monument Bank (FCMB), LAPO Micro Finance Bank and Development Exchange Centre (DEC).
Alhaji Garba Bala, the National Programme Coordinator IFAD/VCDP at the ceremony on Thursday in Abuja said the MoU was a collaboration between the programme and the institutions to provide both technical and financial supports to rural farmers.
He specifically identified timely access to finances by rural farmers as a major challenge impeding their agricultural activities thereby resulting in low food production.
The coordinator, who noted that the MoU was billed for six years, said that it would commence in December.
According to him, collaboration or engaging the services of financial institutions is one of the basic requirements of the agricultural financing of IFAD-VCDP programme to assist our farmers into accessing financial support and services at a very low interest rate.
“The idea behind it 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 the farmers will access finances and at a very low interest rate and by the time the programme exit, they will be 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 which is the whole idea.’’
Bala urged the financial institution to keep to their promises by ensuring prompt and timely release of money to the targeted farmers.
“We all know that financial institutions are out to make profit out of their businesses but at the same time they should be considerate to the rural farmers who rely on them for finances.
“Therefore, we expect them to give them the minimum and lowest interest rate as stipulated.
“ Secondly, whenever they apply for loan these facilities, they should give 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.
“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.’’
Also, Iliya Sambo, Executive Director, DEC, who described the MoU as a welcome development said the whole essence was to ensure sustainability of the programme to see sustainability and them own the project.
Sambo said the collaboration was another market opening for DEC, adding that the hope of financial institutions was to get more clients.
“If we can get that on a platter of gold that will be increasing our mandates. This is a welcome development because l hope we will have better understanding to move this country forward particularly agriculture at the rural areas.’’
Mr Mustapha Lukeman, the Divisional Head, Commercial and Business Banking said FCMB was delighted to participate in the agreement geared toward agricultural development in the country.
Lukema, who described agriculture as key to everyone’s existence and highest employer of labour emphasised that everyone must always play active role in developing it.
Similarly, Mrs Obehi Anene, the Area Manager, LAPO MFB noted that the agreement was to enable farmers access to fund to meet their input demand with loan repayment after harvest.
“Indirectly with this agreement we are having financial inclusion of farmers because most of them stay away on the issue of bank because they feel they do not have relationship with bank.
“This relationship with VCDP is to tell them that you are part of the banking system and you have right to it,’’ she said.