Commercial banks give agric sector N4.68trn loan in 5yrs – Report
A report revealed that Nigerian commercial banks lent N4.68 trillion to the agricultural sector from 2018 to 2022, amid efforts by the Federal Government, state governments, and the FCT to address the food crisis. Published by Alford Conferences Limited, the report highlighted the need for banks to increase their agricultural loans beyond the 5.03% allocated during this period and urged closer collaboration with state governments for better funding.
Access Holdings was the top lender to agriculture with N928.55 billion, followed by Zenith Bank with N873.36 billion. Ecobank Nigeria led in the percentage of loans given to agriculture at 12.28%, with Sterling Bank and FCMB Group following at 8.19% and 7.58%, respectively.
Source: Vanguard
Our Review
The recent report on Nigeria’s commercial banks providing N4.68 trillion in loans to the agricultural sector between 2018 and 2022 is a significant development that underscores the crucial role of financial institutions in strengthening the agricultural value chain. This financial commitment, although a small percentage of the overall loan portfolio, has the potential to drive substantial growth in the sector by enabling more commercial farming, enhancing food processing capabilities, and increasing the production of agricultural machinery.
The focus on increasing agricultural lending beyond the current 5.03% of total loans is essential for addressing the ongoing national food crisis. By collaborating more closely with commercial banks, state governments, and the Federal Capital Territory (FCT), there is an opportunity to attract more funding for viable agricultural projects. This could lead to greater productivity, improved food security, and the ability to generate surplus for export, ultimately boosting the country’s economy.
This report serves as a call to action for stakeholders in the agribusiness sector to advocate for increased financial support and strategic partnerships that can unlock the full potential of Nigeria’s agricultural industry. The upcoming Nigeria Food Surplus Summit presents a platform to push for these necessary changes.
