CBN ORDER BANKS TO LEND TO ALL AGRIC SEGMENTS
The Central Bank of Nigeria (CBN) on Friday ordered banks to lend to all the agricultural value chains and develop sound financial delivery system that would serve the needs of farmers
The apex bank also imposed a deadline of six months for banks to comply with the order failure of which sanctions would be imposed.
The order was contained in a circular to all banks titled, Re: Establishment of agricultural finance departments/ units /desks in head offices/zonal/regional and desks by deposit money banks.
The circular which was signed by Sola Awoyungbo, Director, Financial Policy and Regulation department said: 'All Deposit Money Banks are hereby required to establish Agricultural Finance Department/Units/Desks in their Head/Zonal/Regional offices and branches to facilitate lending to agricultural value chain in Nigeria.
' Deposit money banks are required to implement the following initiatives within six (6) months: Establish Agricultural Finance Departments/Units/Desks in their Head Offices, Regional and Branch Offices; Appoint qualified agricultural graduates and other professionals with relevant experience in agriculture to handle all agricultural lending activities; Develop sound financial delivery system that would serve the needs of farmers and the sector at large; Lend to the entire agricultural value chain (Agric input supply, production, storage, processing, marketing and other areas of agric development); Provide advisory services to their target clientele; and Establish reliable database on agricultural finance for use in planning by government and the private sector.
' The Agricultural finance department in the Head office shall have two units. These are (i) Business Plan Unit and ((ii) Development and Advisory Units. The Business Plan Unit shall: Assist farmers to fit into the agricultural value chain; Give policy direction on agricultural lending processes and procedures; and Maintain the database of all agricultural lending activities.
'The Development and Advisory Unit shall: Assess credit risk and develop markets; Develop need-based products targeted at agricultural value chain financing; Develop Business plan for the operations of the Department.; Determine capacity building requirements of all agricultural personnel/Desk Officers; Develop reporting lines that are in consonance with the bank's structure.
'Each Deposit Money Bank shall render returns on its agricultural business portfolio to the Development Finance Department, Central Bank of Nigeria, Abuja, on quarterly, half yearly and annual basis, on forms that would be provided by the CBN. This circular takes immediate effect while Deposit Money Banks are required to establish Agricultural Departments/Regional/Desks Offices within a period of six months from the date of the circular.'