The Managing Director of Niji Group, Mr. Adeniji Kolawole, has urged the Federal Government to restructure banks for proper credit advancement for the development of agribusiness.
Speaking at the launch of 50 tractor units of Sonalinka assembled by Niji Tractors at Ilero, Oyo State, at the weekend, Kolawale said that if truly government wants to support agriculture in Nigeria, there is need to change its policies towards agriculture and reposition agric banks because all the loans claimed to come from the Central Bank of Nigeria (CBN) are not loans for agriculture.
According to him, most Nigerian banks do not understand agribusiness, even as he added that agriculture is an unusual business and banks cannot use office logic to solve the problems of agriculture.
He said: “Agriculture is not like any other business you do and you can’t use the system in the office to solve it. The banks need to come down to the farm, spend like six months and look at what the farmers suffer before they say they want to support. If not so, we can’t move forward.”
Speaking on the 50 units of tractors assembled by Niji, he said when Bank of Industry (BoI) approved the money to First City Monument Bank (FCBM) for Tractor Owners and Operators Association of Nigeria (TOOAN) to acquire the tractors after meeting all the loan conditions, the Nigeria Incentive-based Risk System for Agricultural Lending (NIRSAL) declined for no reason.
He explained: “That was when we went to Africa French Development Bank for support to guaranty what NIRSAL cannot guaranty after four months of TOOAN members paying for the loan they didn’t actually receive. NIRSAL declined the transaction it was supposed to support, for no reasons knowing full well that this group is well organised and on ground.
“What will make NIRSAL not to guaranty a good transaction that will develop agriculture in Nigeria, that we have to try for another four months to search for another country to guarantee was. That means the money that was supposed to go into Nigerians’ pocket has gone out again. This means we are not ready for agribusiness in the country,” he said.
He lamented that the poor farmers that struggle to get the money from FCMB were paying interest for loan that has not got to them and not even accessed the tractors. He stated that four months of doing that means the pay back on investment is not sustainable in the country.
Also speaking, TOOAN National President, Mr. Elesa Bitrus Yakubu, said the acquisition of the tractors would go down in the history of TOOAN as a big feat for having approached the bank for loan to finance 50 units of tractors successfully negotiated, met the loan conditions and secured approval for the N500 million without intervention from government or any intermediary.