Nigerian Bank Nigeria Bank PHB – N200b Agric Loans – All Banks To Participate In Disbursement

Source allAfrica: Idris Ahmed & Tina a Hassan, 3 March 2010

The Central Bank of Nigeria has extended the disbursement of the N200 billion agricultural loans to all the commercial banks in the country. When the agricultural loan was announced last year, only First Bank of Nigeria Plc and United Bank for Africa (UBA) were selected to disburse the fund.

Union Bank Plc, Zenith Bank Plc, Unity Bank Plc and Fidelity Bank Plc were later added to the banks. CBN Governor Sanusi Lamido Sanusi said on Tuesday that the scheme is now open to all banks. He said N43 billion has been disbursed from the fund to farmers as at December 31, 2009.

Responding to question on the slow disbursement of the loans, governor Sanusi said the first two banks were asked to return the money to CBN because of delay in its disbursement. “We had initially increased the number of banks to six. We have finally said that any bank that is able to find commercially viable agricultural projects can come and use the fund”, he said. He said the disbursement is an ongoing process. “The banks are taking the credit risks, they are restructuring to ensure that their customers meet the acceptable criteria”, Sanusi said. On the allegation that the loan was reduced to N100 billion, the governor said the fund still remains N200 billion.

The fund is been managed by the CBN and the Federal Ministry of Agriculture and Water Resources. Ten banks were originally earmarked to disburse the fund before UBA and First Bank were eventually selected. The remaining eight banks – Union Bank Plc, Zenith Bank Plc, Unity Bank Plc, Fidelity Bank Plc, Bank PHB, FinBank Plc, Intercontinental Bank Plc and Sterling Bank protested of their exclusion from the scheme. This protest was what made CBN to increase the number of banks to six and the eventual extension to all the banks, Daily Trust learnt.

Shedrack Madlion, the Director in the Admiral Environmental Care Limited had told Daily Trust in an interview that: “The two banks this money was lodged should also be able to account for the N666million as cash flow from this money that has been with them. The rural farmers have not gotten any money. The procedures to disbursement this money was not feasible and achievable. Farmers that put food on the Nigeria’s table do not have bank account. Government has not been able to come up with a proper programme to reach him, so who are you disbursing to?”

Farmers have described the extension of the disbursement of the loan to all banks as a welcomed development. They however said that the requirement for accessing the loan is still unfavourable especially to small holder farmers in the rural areas.

Nigerian Bank Nigeria Bank PHB, Fidelity Bank Plc, Finbank Plc, First Bank, Intercontinental Bank Plc, Sterling Bank, Union Bank plc, Unity Bank Plc, Zenith Bank Plc