The Federal Government in collaboration with the International Fund for Agricultural Development Assisted Value Chain Development programme (IFAD-VCDP) has trained financial institutions in enhancing access to credit facilities to farmers.
The state VCDP programme Coordinator, Mr Samuel Adeogun, while speaking at the training on Tuesday in Abeokuta, said there was a need for capacity building of financial institutions on agric lending.
Adeogun said the training was to sensitise the participants on VCDP activities and make them realise the need to give appropriate support to rural farmers.
Adeogun who was represented by Mr Tunde Badebo, Rural Finance officer for Ogun VCDP, stressed the need for financial institutions to come together by unveiling financial services that would assist in the development of agricultural value chain.
He said the aim of the capacity building was to sensitise the participants on the VCDP activities and educate them on the need to give appropriate support to rural farmers in the state.
“We want to build the capacity of some of the financial institutions, the microfinance and commercial banks toward their products for our farmers.
“We also observed that most financial institutions have problems in granting loans to our farmers and small scale farmers are in need of credit facilities to boost their production.
“Our aim is to link farmers to financial institution; that is why we want to educate the participants about the activities of VCDP, farmers, processors, producers and marketers that are into rice and cassava value chain,” he said.
He added that the training would be beneficial to the institutions by exposing them to agricultural intervention funds from the Central Bank of Nigeria.
Adeogun disclosed that the VCDP had signed a Memorandum of Understanding with the financial institutions to support the implementation and linkage for VCDP farmers.
He, however, urged, the participants to pay attention to the training in order to increase their skills on how to relate with farmers in providing support and recovering loans.
Also speaking, the consultant to IFAD- VCDP Mr Mustapha Raji, who spoke on agricultural value chain for VCDP financial institution partners, stressed the importance of value chain in agricultural financing and rural development.
According to him, the value chain identifies the set of actors and activities that brings a basic agricultural product from production to final consumption.
Raji said it was very important for the institution to identify the strongest actors in the value chain before granting loans.
He advised the financial institutions to look beyond one stage of the value chain, saying they can also give loans to other actors in the agricultural value chain.
He said that the training would enlighten the financial institution to be fully ready to provide financial support to the rural farmers under the VCDP farmers and also help them in managing risk in the Agric business.
Another consultant to IFAD -VCDP, Mr Victor Obaletin, lectured the participants on risk management in agric lending.
Obaletin noted that there were risks associated with agric lending but if carefully managed over time would be profitable.
He said that to manage risk in agric lending, the financial institutions, must identify the strongest actors in the value chain before approving any loan.
Mr Idowu Olamide and Mrs Agboya Tina, who spoke on behalf of other participants, appreciated the Federal Government and IFAD- VCDP for the training,
They said the training had given them the knowledge on how to deal service the farmers better.