Union Bank finances agriculture with N40bn June 10, 2012

Union Bank finances agriculture with N40bn June 10, 2012 Union Bank of Nigeria Plc, has said that its current portfolio on agricultural lending is about N40bn, adding that over 60,000 farmers have benefitted from its agriculture lending. The bank’s Managing Director, Mrs. Funke Osibodu, said this during an interview at the sidelines of a sub-regional workshop of the African Rural Agricultural Credit Association in Abuja. The seminar, with the theme “Enhancing the agricultural value chain through innovation,” was aimed at transforming the agriculture value chain. Osibodu said that lending to the agricultural sector had been profitable and described as the driving force for the bank’s increased and consistent lending to the perceived ‘risky’ sector. “We have given out so much. I would say we have given out about N30bn to N40bn on agriculture. That is the current portfolio but we have been lending very actively to agriculture for close to 30 years. “The performance rate has not been bad, especially for small scale lending. We have a customer base of over 60,000 comparising farmers that we lend to all over Nigeria in different areas. We understand the seasons.” Osibodu noted that the bank’s plans currently was to move beyond the small scale agricultural lending and focus more on the large scale farmers. This, she noted, would, create the needed chain of economic growth for the nation. She said the outcome of the workshop would enable banks to better structure their credit facilities to farmers. She said, “For majority of banks, agriculture financing had not been an attractive and profitable sector for the deployment of shareholders/depositors funds due to the perception of high risks. “We need to release financial resources on a sustainable basis to Africa’s agriculture. Union bank has been supporting agriculture intensively for years.” She said the long term benefits of the value chain model would help to increase per capital income, generate employment and develop the sector. Agriculture employs 60 per cent of the population. It also contributes up to 42 per cent of the country’s GDP and about 75 per cent of the non-oil sector GDP. Osibodu said if wealth creation and poverty reduction were to be achieved, there was need to adopt efficient and cost effective financial services that supported agricultural production and innovation across the value chain.