Farmers in the country have described the nine per cent interest rate on loans from banks as desirable to improving their productivity and current efforts at boosting agricultural sector contributions to the nation’s Gross Domestic Product (GDP).
The apex bank had last Thursday released a new credit Guidelines for Accessing Real Sector Support Facility (RSSF) through Cash Reserve Ratio (CRR) and Corporate Bonds.
Under the new guidelines, agricultural, manufacturing and the sectors considered as growth and employment-stimulating sectors, can borrow long term funds of as much as N10 billion at consolidated nine per cent interest rate.
The farmers’ groups however want the apex bank to effectively monitor the implementation of the credit policy with a view to ensuring that deposit money banks (DMBs) comply strictly with the disbursement requirements.
Speaking on the new monetary policy measure, the President of the Rice Farmers Association of Nigeria (RIFAN), Alhaji Aminu Goronyo, who recalled that rice farmers had being enjoying the nine per cent lending rate since 2015 under the CBN Anchor Borrowers Programme (ABP), expressed optimism that other sub-sectorial productivity would be enhanced through the latest initiative.
He noted that the credit regime to rice farmers under the ABP had helped in increasing rice farmers production significantly over the years, rising from about two million and 3.5 million tonnes yearly to about nine million tonnes currently.
The RIFAN leader said: “Before the single digit interest rate by the CBN, our production annually was not more than between 2 million and 3.5 million tonnes per annum but today, we are producing almost nine million tonnes because of that intervention. I am sure it will be the same for other commodities that will enjoy this intervention.”
Commenting also, the President of National Cashew Association of Nigeria (NCAN), Mr Tola Faseru, urged the monetary authorities to commit all resources to the implementation of the guidelines in order not to turn into mere lip service.
Recalling that this is not the first time the apex bank was initiating credit regimes designed to make lending to to agriculture easy for the DMBs, Faseru however lamented the poor implementation as most banks see lending to agriculture as very risky.
He explained: “I hope the commercial banks will comply with that because there was a time CBN told them that out of their profit, certain percentage should be channelled to agriculture and the manufacturing sector but they never kept to it.
“Before now, most of the commercial banks have been shying away from lending to agriculture, they like the quick return type of business. They see agriculture as very risky but that is where we have our comparative advantage as a country, so we need to develop the sector to be able to diversify the economy away from oil.
“This is a very laudable policy by CBN and we commend CBN for that but we plead with the CBN to put a mechanism in place to check compliance by commercial banks. I think CBN has been strong recently in their supervisory role of commercial banks.
“We trust that they will be able to follow through to ensure that the policy is implemented by the commercial banks; it will go along a way to help us grow the agriculture and indeed the export sector”, Faseru added.
The National President, Women Agro Allied Farmers Association, Mrs. Lizzy Igbine, was also quoted by the News Agency of Nigeria (NAN) as saying that although the nine per cent lending rate would encourage farmers to increase production, there was the need to reduce the interest rate further down to five per cent to optimize farmers’ production.
Igbine expressed optimism that the new interest rate regime would go a long way to help farmers, cautioning however that farmers hope there won’t be any hidden rates or charges that banks will make them pay after accessing loans.
