Overview
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.
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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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Reports
On
these pages, you can find information about The Bank of Agriculture: latest
financial data, news, ratings, presentations and other facts and figures of
interest to institutional investors and analysts. Bank of Agriculture is the
nation’s apex...
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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.
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.
• 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.