Daily Independent (Lagos)INTERVIEW
25 November 2008
Posted to the web 26 November 2008
Our agricultural banking started at the beginning of this year. The experience has been most beneficial. One thing we have found out is that microfinance banking goes to the root of the economy. You should be able to recall that at the earlier part of this year there was a timid food crisis in the country to the extent that the presidency has to order for the importation of large quantity of food stuff like rice. This is not because we do not have enough farmers in the country.
It is not because we do not have food crops or arable farmland in the country but simply because our farmers have been neglected.
The big banks are trying their very best but when it comes to assisting the rural farmers or the rural dwellers, it is the microfinance banks that would still go to the root of the problem. This is simply because we operate at the micro level. Most of our farming and agricultural activities in this country is lacking. That is why we are trying to visit some of these villages and the rural communities to solve their immediate problems. In that way we are not just increasing employment or income for them but also increasing the quantum of food supply in the country and agricultural production.
If you want to lend out money and to ensure that the money comes back to you safely, it should do so through microfinance banking. Our people, I mean the rural farmers or the rural dwellers do borrow money and they actually pay back. What they only want is access to these funds. And what do they need the funds for- to buy inputs for their agricultural activities. We have not experienced any bad loans so far while lending in our agricultural businesses.
How is your bank coping with the long gestation period of farming?
Generally agriculture is a long gestation period business and you cannot run away from it, but for us in IMFB, we have defined our target. The commercial banks go after the big time farmers and we go to the rural farmers. In that way, we do not fall into the trap of big borrowers like the experience of commercial banks. For instance here in Lagos, we go to Ikorodu, Epe, Badagry. We meet the rural people, those that are actually doing farming and we empower them and these people pay back. We know that the gestation period is long. For instance, if you are lending for a fish farmer your tenure cannot be anything less than six months. If you are lending to somebody planting cassava, the tenure cannot be anything less than 10 months and these are gestation period that you must cope with.
If you want to actually do agricultural micro financing and empower the farmers, you must be aware of this gestation period and must be willing and ready to give them moratorium and that is what we do here at IMFB, it is not a problem to us because we are all aware of these issues.
How can one access IMFB agricultural loans?
Very simple, you open an account, just a savings account of only N500. After opening that account, you belong to a group because we believe in dealing with groups of farmers. You can now come forward with the group which could be between five and 10 persons in a particular group. You can approach us with your request and our collateral arrangement is very simple. It is flexible collateral and within the next 48 hours your loan is available to you.
What is the volume of loan advances portfolio in IMFB?
In terms of loan advances portfolio in agric financing, as at the moment, we have in excess of N400 million and we are still growing. In terms of customer base, I mean those who we have actually benefited from our facilities are more than 3000. We have them in Epe, Emotan, Aggowa, Ikosi. We also have them in Ikorodu, Ijegun, Odogiyun, Ijede and all other surrounding villages there. We also have them Badagry, Ojo, Agege, Igondo and so many others. These are the areas where we have farmers that are currently benefiting from IMFB.
What do think that customers should be expecting in the nearest future?
IMFB agricultural banking programme is a total package. We do not just give farmers money. In addition to empowering them financially, we give them capacity training. What we mean by that is that we exposed them to the latest farming techniques.
Recently there was an agricultural show held in Nasarawa State. At that show, we were in touch with representative of the National Roots Crops Research Institute and they showed us latest research findings on cassava. Instead of planting your cassava and wait for 12 months to harvest, you can actually plant and harvest within the next six months. The problem is that most farmers are not aware of improved type of cassava. Under our capacity building program, we tried as much as possible to avail farmers with the latest technology and improvement in the farming business. This is one thing we do for them in our area of capacity building program. Another thing we equally do for them is granting them access to inputs and market so that they do not end up producing crops that would waste at the end of the day because they could not have a place to dispose these particular produce. When they can not sell, it makes it boring so we provide a ready made market for them