Banking rural women with agric initiatives

Nigeria is endowed with abundant natural resources such as solid minerals, oil and gas as well as arable land for agriculture, among others. But despite being the seventh most populous country in the world with abundant youth workforce, reports show rising unemployment, with only about 40 per cent of the arable land being cultivated, leading to food shortage and huge import bill.

Recently, the dwindling revenue from crude oil, which accounts for about 80 per cent of Federal Government’s foreign exchange earnings, exposed the country to the challenges of the global economy, as past administrations failed to diversify the economy, while the current one is making concerted efforts.

So far, agricultural development has become bankable and identified as the game changer, although it has remained sluggish and agrarian, with farmers using crude implements and women being mostly hit with low farm yield, inability to access funds from financial institutions, limited access to land and lacking the requisite knowledge on how to improve yields in their farms.

Not comfortable with the huge food import bill, which drains about 20 per cent of government earnings, the Central Bank of Nigeria (CBN) over the years launched various finance initiatives to support Federal Government’s agriculture policy thrust. These were mainly to facilitate increased flow of financial services to the sector and drive growth and development of agriculture. It also gave concessions to women.

As at 2011, the importation of rice, wheat, fish and sugar stood at over N1.1 trillion, although aggressive measures by government between 2011 and 2014, pushed national food production by over 21 million metric tonnes , leading to a sharp reduction in food imports. Nigeria’s food import bill fell from an all-time high of N3.19 trillion in 2011 to N635 billion in 2013, representing 403 per cent reduction. Also, direct farm jobs rose by 3.56 million between 2012 and 2014, making agriculture an exciting sector attracting the attention of financial institutions.

There are Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) and Agricultural Credit Guarantee Scheme Funds (ACGSF) which guarantee banks’ loans to Agribusinesses and provides interest rebates to borrowers and on-lending schemes; Commercial Agriculture Credit Scheme (CACS), Micro Small and Medium Enterprise Development Funds (MSMEDF); the Real Sector Support Funds (RSSF) and the Export Support Fund (ESF). These are funds the CBN provides to agribusiness through banks.

In 2010 Diamond Bank made “a measured” entry into financing the agriculture sector by engaging an international consulting firm to assess the risks and opportunities across all agricultural value chain of crops and livestock of economic importance in Nigeria, which outcome formed the basis for bank’s Agrifinance desk ahead of the CBNs directive to all commercial banks to do so.

Consequently, the lender has provided improved access to finance through key considerations into its pricing, products, underwriting processes and marketing strategies with more than N100 billion disbursed to over 400 agribusinesses across the various nodes of the agricultural value chain in the last five years.

Diamond Bank’s Head of Agric Finance, Lois Sankey, said the institution is very passionate about growing and driving financial inclusion through proven Agricultural Value Chain Financing models, especially in the rural areas.

“The programme we are currently working on, the Rice Anchor Borrower Program has direct impact on financial inclusion and rural financing…. And we have N2.5 billion as portfolio exposure appetite to this program alone. That is a lot of commitment considering that the cost of production per hectare is a mere N178, 000.00,” she said.

According to her, the Bank is leveraging its partnership with United States Agency for International Development (USAID) Market II and other agencies on the project to support and improve capacity and livelihoods of small holder rice farmers in target states across Nigeria.
Currently, the bank has struck major milestones, including the signing of $33 million Agrifinance, two-year Agric Technical Assistance programme with International Finance Corporation, targeting 2000 small holder farmers; training of 60 key members of staff along the agriculture value chain in partnership with the USAID, engagement with Africa Cocoa Inputs Finance pilot with Technoserve and over N5 billion disbursement to 15 projects under CBN’s CACS, among others.

Why focus on women? According to the Food and Agriculture Organization (FAO), women make up to 43 per cent of the agricultural labour force in developing countries, while research showed that on the average, their yields are about 20 per cent to 30 per cent lower than men because they have less access to land, improved seeds, equipment and most importantly finance and information.

MD/CEO, Diamond Bank, Uzoma Dozie

Diamond Bank’s strategic focus on female farmers has made possible the provision of free technical training and financial grants to rural women involved in agriculture, in an initiative called Beta Life for Female Farmers aimed at empowering them across the 36 states.

The bank’s spokesperson, Ayona Trimnell, said the move to help female farmers in the rural areas improve their crop yields and farming method is rooted on the fact that increased farm yield by women can significantly help in reducing the current food gap.

“Women form a large pool of farmers in the country today and they contribute significantly in the food production basket. But they are hardly considered when measures for increased yields are being introduced by either the government or other investors,” she said.

The intervention also forms part of the bank’s Women’s Wealth and Well-being Initiative which has three main objectives: Empowering women economically especially in the area of agric business, providing basic health care education and services to women in rural areas, leading to improved productivity, growth and value addition of women in the cassava value chain.

The first phase of the project, which commenced in 2014, involved training 200 women in Oyo and Ogun states on best agronomic practices, particularly on cassava production and processing. Other areas of the training/capacity building programme involve access to credit (either for production or processing) and financial advisory services, agricultural extension and research services; technical assistance on processing and access to markets and assisting the groups in inculcating a savings culture through the opening of BETA Savings for the targeted groups and group members.

As part of CSR, it has supported farmer groups like Agbajowo CMC Processing Group, located in Shagari village, Akure; Agbeloba Cassava Processing Group, Ile-Oluji Farm settlement; Adura Agbeagba Cassava Processing Group, Ile-Oluji;  Oluwapawopa Cassava Processing Group, Owo; and Okonilewo Cassava FUG Cooperative Society, in Igba.

Others are Onipepeye Cassava Processors Group, Ikulodi; Alase Gari Processing Group, Iseyin; Agbeloba Cassava Farmers Groups, Iganna; Agbelere Cassava Farmers Group, Fiditi; and Garri Gbayi Cassava Processing Group, Iseyin.