We are a federal government owned development bank with a mandate to provide low cost credit to small holder and commercial farmers, and small and medium rural enterprises. We also provide micro financing to small and medium scale non agricultural enterprises. Our aim is to ensure effective delivery of agricultural and rural finance services on a sustainable basis to support the national economic development agenda, including food security, poverty reduction, employment generation, reduction in rural to urban migration, less dependency on imported food items, and increase in foreign exchange earnings.

Credit Function
Bank of Agriculture credit functions are activated at the level of direct Lending, on-lending, collaboration, and monitoring of credit.

This activity involves:
• Direct lending to qualified loan applicants engaged in..

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Developmental Function
Credit is a critical factor in development of agriculture, the rural areas, and small business in general. This is because it drives capital formation and technology upgrade.
Bank of Agriculture activity in this area involves the direct making of loans and strengthening of local micro finance banks, which deliver credit at the local community level.

We have embarked of various initiatives to strengthen the cooperative credit structure at local and state government level as well as rural micro finance banks. The effect is that adequate and timely credit is made available to the needy. In order to reinforce the credit functions and to make credit more productive, Bank of Agriculture will begin the implementation of a number of developmental and promotional activities such as:-

• Work with cooperative groups at the states and local government level to prepare development action plans for themselves.
• Enter into collaborative or on-lending MoU with state governments and cooperative associations and microfinance banks specifying their respective obligations to improve the affairs of the groups and banks within a stipulated timeframe

• Monitor implementation of development action plans of cooperative associations and micro finance banks and fulfilment of obligations under MoUs

• Provide financial assistance to cooperatives and micro finance banks for establishment of technical, monitoring and evaluations cells

• Provide organisation development intervention (ODI) through reputable training institutes like Federal cooperative colleges, Universities of Agriculture, and departments of agriculture of various universities in Nigeria.

• Provide financial support for Federal Cooperative colleges and departments of cooperative studies in various universities and polytechnics

• Provide training for senior and middle level executives of local commercial bank branches, micro finance banks and cooperative associations

• Create awareness among the borrowers on ethics of repayment through local debt collectors and cooperative marshals that enforce timely repayment and prompt remittance of same to the lending institution

• Provide financial assistance to microfinance banks for building improved management information system, computerisation of operations and development of human resources.
•‘Lending To Real Sector Growing Significantly’
On the sidelines of the 19th Nigeria Economic Summit (NES 19) at the Transcorp Hilton, Abuja, Managing Director of Ecobank Nigeria Limited, Mr. Jibril Aku, in a chat with MARCEL MBAMALU, spoke on efforts to fund agriculture. He emphasized that banks already have robust and diversified loan portfolios. Aku also spoke on a wide range of industry issues. Excerpts:
Nigerian banks featured prominently in this year’s Economic Summit (NES 19), which focused on revitalising Agriculture as business; how would you assess private and public sector participation in the conference?
The NESG Economic Summit is rated very high and the focus on agriculture is in the right direction and aligns with the Banker's Committee development efforts. The Banker’s Committee has taken some key focus areas with a view to funding, developing and supporting those specific economic areas appropriately.
  At this Summit, we saw strong private and public sector participation at all levels; that is, senior government officials, captains of various private sector institutions, among others. The representation of all stakeholders in the economic development was good.
   The Banker’s Committee has some key sectors being highlighted as earlier stated such as agriculture, manufacturing which has thus led to CBN urging banks to adopt and fund those areas and Agriculture is one of the beneficiaries.
   CBN has started by playing an active role through some intervention funds which are low interest and long tenored to stimulate the growth in those sectors and an essential part of this is also to look at the value chain in the agriculture sector from production, distribution, among others
  NESG did very well to focus on Agriculture this year and the banks are also in alignment with desired economic growth areas.
  The total industry loan book has grown from one percent  to circa four percent  for Agriculture over a period of four years. The amount is estimated to be in excess of circa N330billion.
   NESG is also showcasing the success stories of the Agricultural sector to promote more private sector participation.
   The Ministry has done a good job collaborating with various State Governments with a view to ensuring holistic growth in the agricultural sector and provided incentives to deepen the sector.
     If you take a flight from Lagos to Kano and look at the number of  land that is cultivated, you will see that it is a marginal percentage compared to total arable land. So, it takes continuous and active involvement to look at the yield per hectare and the overall yield of land that is cultivated through improved seedlings, mechanized agriculture and educating workers. 
   We, thus, have to get more land cultivated and increase the private sector participation. Most of the Governors today have testified to the support and growth of agriculture across the value chain in their respective states.
The banks, according to you, now pay good attention to agriculture; what is Ecobank’s contribution to this general percentage growth to agric loans?
   Agriculture constitutes seven percent of Ecobank’s total loan portfolio. In portfolio value we have grown significantly compared to less than one percent four years ago.
   Clearly, we have actively participated in supporting agriculture both in the production, distribution and other areas of the value chain. We have been active players and will equally continuously transfer skills from the other economies where we have affiliates supporting the agricultural sectors.
   The experience from these areas will help push the agricultural sector further in the right direction as desired by the Government. 
Do you think the banks are doing enough in terms of real sector/infrastructure financing?
  If you look at the aggregate statistics released by the central bank, you will see that lending to the real sector is growing. 
  The banks are supporting business growth and thus will continue to lend against sound credit principles.
 The Central Bank and the Bankers Committee will continue to look into the challenges of the real sector with a view to minimising the obstacles so that banks can adequately ensure the desired growth.
  The CBN is also ensuring that banks diversify their portfolio and this is important to help absorb shocks due to volatility in specific sectors of portfolios and changes in those sectors by either internal or external factors.
  Over concentration and downturn in those sectors help in risk spread and reduce impact on profits. There is always cyclical turn of events in sectors exposed to external influence.
  We are looking at other key sectors such as SMEs, manufacturing, Mobile banking which drives financial inclusion and reduce the amount of unbanked Nigerians.
The banking sector is evolving with innovative products and better service provision.
The apex bank keeps tightening liquidity as banks fall over themselves to attract big-ticket deposits. Are banks really cash-strapped, as the current mood suggests?
   The banks are not cash strapped. The mopping up of the public sector funds was promptly complied with by all banks and was simply done via reduction in liquid assets portfolio held by each institution. Although we prefer the indirect approach through Open Market Operations (OMO) compared to the direct approach of increasing the Cash Reserve Ratio (CRR).
    The banks are thus liquid with adequate capital to ensure increased lending business.
Given all of these, what is your general perspective on the operations of Nigerian banks?
    The banking industry has recovered sufficiently and we will continue to see banks play more active roles in the economy with the guidance of the Central bank.
   The Central Bank is coming with a guideline that makes us take a broader view of the different sectors in the economy and how we operate and support those sectors. It is coming up with sectoral limits that would encourage diversification.
    We are also seeing the Federal Government’s transformation agenda, which is making sure that most sectors of the economy are private sector-driven such as the power privatization process, agricultural mechanization and value chain drive etc. 
   Businesses grow when we have a value chain system that ensures profitability; the banking sector is fully tapping into all of these dependent factors.
Your bank appears to be grappling with some issues bordering on corporate governance; from your perspective, what are the real issues?
The bank is strong and sound with the current architecture and operations. We remain a systemically important bank in Nigeria. 
   The issues bordering on corporate governance are with respect to Ecobank Transnational Incorporated (ETI), the parent holding company in Togo. The issues are under review by the Securities and Exchange Commission (SEC). The SEC has released a statement that the issues on the corporate governance are being looked into.
   Beyond the issues above, bank remains strong operationally and structurally with increased deposit growth with focus on the corporate goals/objectives.
  Thus the issues have to do with the parent company.
But you know that the story first came in from the international media …
    The bank is an international bank with strong Pan-African presence in 34 countries in Africa and five representative offices in France, Dubai, China United Kingdom and South Africa respectively.
  Thus to that effect as an international bank our activities will attract attention from global financial hubs as we have wide geographical footprint.
  Has this problem affected your bank’s customer base in any way?
    This has not in any way affected our deposit base and operations whilst we have ensured continuous stakeholder engagement process.
   We continue to deepen and focus on our business operations and ensure customer satisfaction both locally and regionally.
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