In pursuance of its vision to enhance increased productivity in agricultural production, the Bank of Industry has launched a N10 billion Agro Mechanization fund.
The fund according to Waheed Olagunju, the Acting Managing Director of BoI, is exclusively earmarked for the acquisition of agro equipment by either agricultural service providers or well established farmers.
Speaking at the Memorandum of Understanding signing ceremony with some Foreign Development Partners for the implementation of the N10 billion agro mechanization fund, on Wednesday in Abuja, Olagunju expressed optimism that better access to credit to fund acquisition of agro equipment, will lead to improved efficiency in the agricultural sector.
He hinted that the fund is divided into three categories for applicants namely: Micro, Small and Medium, with different sums ranging from N10 million up to N500 million, adding that the loans will be availed at an interest rate of 9 percent per annum with a maximum tenor of 5 years.
“Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NISRAL), will be playing a central role by providing the 75 percent loan guarantee for loans of up to N50m and 50 percent loan guarantee for loans above N50m.
“We at BOI are also assured of the success of the Agro Mechanisation Product program considering the caliber of organizations that are we partnering with. Their integrity, expertise and track record speaks volumes,” he stated.
Olagunju posited that “the task of economic recovery and self-sufficiency in food production is a huge one that BOI can’t embark upon alone. We are open to cooperation and collaboration and together, we can make positive impact on the country’s economy.”
“The MOU is a testimony once again to BOI’s unflinching support for the Agricultural sector. Agriculture is the largest employer of labour in the informal sector accounting for 70 percent of total employments. Its contribution to GDP is now at an all-time high of N5.04 trillion in the 3rdQuarter of 2016.
“All the Agro related product products that BOI has launched, is testimony to the bank’s resolve to support the Federal Government’s effort at promoting agriculture, reduce the food import bill and create more jobs,” he stated.
The foreign development partners for the effective implementation of the fund include: GIZ, Propcom Mai-Karfi of United Kingdom’s Department for International Development (DFID) and World Bank’s Growth and Employment in States- Wholesale and Retail Sector (GEMS4).
Responding after the MOU Signing, representatives of the 3 international development partners took turn to commend BOI for its courage in venturing into agricultural sector funding which many financial institutions see as risk-filled.
Busuyi Okeowo, GEMS4 representative at the event, while urging BOI to endeavor to remain consistent in the effective implementation of the project, adviced BOI to pay more attention to Post-Harvest losses incurred by farmers due to lack of modern technology enabled crops processing and storage facilities.
Okeowo added that these losses run into billions of naira and therefore should be paid priority attention as the agricultural sector has the required potentials to turn-around the nation’s economy.
