Deposit Money Banks in the country have pledged to increase financing for the agricultural sector, in a move considered to be a major step in ensuring the sustainable development of the sector.

The banks made the commitment through the Bankers’ Committee’s Sub-Committee on Economic Development – at a special meeting of the BC, which was held in Lagos on Saturday.

A statement from the committee said, “Bankers’ Committee members emphasised the need for continued collaboration with key players in the agriculture value chain to achieve increased lending to the sector.”

It added, “The banking sector will continue to engage the Ministry of Agriculture and Rural Development to strategise on ways to boost lending to the value chains to ensure sustainable growth.”

 The meeting, which had representatives of the Central Bank of Nigeria, Deposit Money Banks, the Ministry of Agriculture and other stakeholders in attendance, had the theme, “The Role of the Nigerian Financial Sector in Enabling the Agriculture Industry in Nigeria.”

The statement read in part, “The committee recognised that the agriculture sector, which employs about two-thirds of Nigerians and is the highest sectoral contributor to the nation’s GDP has yet to reach its potential as a key contributor to national revenues and export earnings.”

Consequently, the statement noted, the CBN Governor, Mallam Lamido Sanusi, and other bank executives used the occasion to collectively emphasise their commitment towards making the agricultural sector risk-free and profitable for bank financing.

Concerning the progress made so far, the statement said that lending to the agricultural sector, which formed only 1.52 per cent of total bank lending in 2009, had increased to 3.5 per cent.

The statement added, “It was agreed that to ensure that the year-on-year lending target to the sector is achieved, there is a need to understand progress made so far in the agriculture value chain, identify commercial opportunities within the value chain, address risk issues associated with the sector and align with the Ministry of Agriculture on key priorities for the sector in 2013 and beyond.”

At the meeting, the Ministry of Agriculture highlighted efforts it had made to revive the various sectors and boost their production, while the CBN once again explained the Nigerian Incentive-based Risk Sharing System for Agricultural Lending, an innovative scheme aimed at derisking the entire agriculture value chain.

Source: Punch