Okwe Obi, Abuja
Minister of Agriculture and Rural Development, Chief Audu Ogbeh, has said the Bank of Agriculture (BOA) crashed in the past because most farmers who collected loans failed to pay up.
Ogbeh explained that most debtors could not meet up because they failed to do certain things such as soil testing, to know which was fertile enough before planting which resulted in poor yields.
The minister said this in Abuja, yesterday, at the commencement of financial advisory services for the restructuring of BOA.
Said Ogbeh: “One of the biggest challenges of agriculture in the past has been the issue of credit. There has also been the issue of management of the credit. Many high borrowers who took loans from the bank did not pay back. I do not like to believe that they refused to pay. I would rather say that they failed to pay. Most of them were big time farmers but absentee farmers. Many of them invested in agriculture but failed to do certain things. A farmer planting whatever crop must first do soil test to know if the soil is fertile, or acidic.”
He also said over N200 billion has been injected to recapitalise the bank and give room for farmers to buy shares.
“If the structures we want to put in place start working and we raise the capital base of N200 billion to N250 billion and farmers can access credit at the lower end of the single digit, I am talking of something lower than 6 percent, we hope to achieve a whole lot of things.”
Meanwhile, the Director General, Bureau of Public Procurement, Alex Okoh, explained that recapitalisation of BOA will provide basic financial services especially for rural farmers.
“It will provide basic financial services and mobilising financial deposits in the rural communities. It will also encourage the formation of organised farmers cooperatives, which will accelerate rural development as it provides a lending banking institution in the rural communities,” he added.