• Innovative Banking in Nigeria

HERITAGE BANK: THE BANK THAT IS CHANGING NIGERIA’S AGRICULTURE LANDSCAPE

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Nigeria’s agriculture sector over the years have had poor access to financial services that enable farmers and other agricultural producers to adopt new technologies, improve market linkages, and increase their resilience to economic shocks.

 

Yemisi Izuora writes that poor access to financial services that enable input suppliers, processors, traders and others in agribusiness to address liquidity and encourage targeted private sector engagement in agriculture remains a challenge, until recently Heritage Bank deploys huge resources and services but with firm partnership with the Central Bank of Nigeria, CBN, to lift the sector to enviable position. Beginning from 2010 to 2011, the federal government after years of neglect, began to reform the agriculture sector and to refocus the sector, government decided to implement a new strategy known as the Agricultural Transformation Agenda (ATA).

 

In 2011-2016, the focus was on rebuilding a sector whose relevance had shrunk dramatically which reflected in the lack of lending to farmers by the financial system and the dramatic levels of food imports from across the world. That intervention, the ATA, served its core purpose of helping refocus Nigeria’s attention on agriculture. Development of Agriculture continues to remain a critical issue for Nigeria’s economic growth, poverty reduction and ensuring food security of the country, as over 70 per cent of the rural households depends on agriculture as their principal means of livelihood. The recent volatility of food prices enduringly affected Nigerian food system.

 

The imposing of import restrictions by the government while prices of food were high and resulting distrust in the functioning of the price of crude oil at the international markets forced countries that depend on agricultural imports to change their strategies to meet domestic demand. Given this development, many Nigeria financial institutions started investing in agriculture. Several of these large-scale investments triggered high rates of agricultural growth in recent times. In Nigeria, with access to finance still a significant challenge, agriculture remains underdeveloped with the majority of farmers in the rural areas still practicing subsistence farming.

 

A very commendable gesture by the Central Bank of Nigeria (CBN), is the decision of the bank to go into collaboration with the government and commercial banks to establish some notable agricultural schemes as a way of bridging the funding gap. Such interventions include the Commercial Agriculture Credit Scheme (CACS), Commercial Agriculture Development Programme (CADP), and the Interest Draw-back scheme, Agricultural Credit Support Scheme as well as the recently introduced Anchor Borrowers’ Programme (ABP).

 

The broad objectives of most of the schemes are to fast track development of the agricultural sector by providing credit facilities to commercial agricultural enterprises at a single digit interest rate; enhance national food security by increasing food supply and effecting lower agricultural produce and product prices, thereby promoting low food inflation; generate employment and diversify revenue base. In all of these commercial banks in the country commendably keyed into those measures that have seen the sector lifted out of inactivity.

 

Heritage Bank’s Exemplary Intervention

Heritage Bank Plc, by every instrument of measurement has distinctly and evidently made funds available to both individuals and corporate organisations in their efforts to increase agricultural output in line with governments policy and CBN intervention strategies.
The bank has palpably financed critical agricultural projects in the country and, in the process supported many farmers. As one writer recently noted, “Since the five eventful years, the bank has opened its doors to its teeming customers, the showpiece of its operations is a full gamut of completed, on-going and nascent people-oriented programmes- create, preserve and transfer wealth across generations in the country.

 

This line of operation is steadily yielding great results as the nation continues to move its economic base towards the direction of the future, with a robust emphasis on thoughts about diversification of the county’s economic base.” For some period of operation, Heritage Bank is being positioned into a bigger and stronger financial institution that is placed to play a significant role in the much-envisaged transformation of the nation’s financial sector in line with the country’s stature as one of Africa’s largest economy. With the increasing recognition of agriculture as the ‘beautiful bride’ of Nigeria’s economy,

 

Heritage Bank’s unfaltering energy and commitment in agricultural financing which are fast gaining new interests and more attention within the business circles is helping to rebalance the sector such that Nigeria would soon become the food basket of the African continent.
As agriculture continues to be business, financing provides tremendous opportunities for lenders and borrowers, either at small or large scale. Heritage Bank has not only encouraged both governments, corporate and individual (including young people to embrace optimal productivity and greatness in this sector), it has taken the front seat in the drive to support them in the attainment of noble agricultural virtues by funding various agricultural projects in several states in the country.

 

Partnerships As Growth Strategy

The Bank believes in team work and that is why partnership with various critical stakeholders and institutions remain a major consideration to realise its objectives. In line with its collaborative initiative the Heritage Bank Plc entered into a partnership understanding with the Nigeria Incentive Based Risk Sharing System for Agricultural Lending (NIRSAL) in a bid to improve the agriculture value chain though increasing financing to the sector.

 

The partnership aims at identifying and securing financing of impactful agribusinesses within all the segments of the agricultural value chain. The financing was designed to cover segments from primary production of raw materials and sustaining the processing industries to exportation of the produce. Ifie Sekibo, the Managing Director of Heritage Bank, offered a wonderful explanation as to the reason for the partnership. To him, the partnership will avail credits at very low interest rates to commercially viable agricultural projects that have been packaged and fully de-risked.

 

Before then arrangements have been concluded by the bank to revolutionise agricultural sector by widening and deepening the participation of digital generation in agribusiness. Sekibo was convinced that support of NIRSAL would help the bank develop a digital agribusiness platform that will strengthen distribution of human capital that meet parameters of agribusiness.

 

READ MORE: https://orientalnewsng.com/heritage-bank-the-bank-that-is-changing-nigerias-agriculture-landscape/

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