Banks’ lending to agriculture sector is expected to rise from the 3.5 per cent to seven per cent in the next decade, Central Bank of Nigeria (CBN) Deputy Governor, Financial System Stability, Dr Kingsley Moghalu, has said.
He made this known at the weekend on the sidelines of the end of the Euromoney conference in Lagos.
Moghalu said the Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) initiative has boosted agricultural lending.
He said the level of attention the subsector is getting is a reflection of a new thinking that it holds key to the economic growth and development.
Data from the CBN indicate that NIRSAL introduced in July last year, is determined to grow loans to the sector to four per cent of banks’ total loans, from the average of 1.5 per cent in 2009.
The NIRSAL guarantees up to 75 per cent of bank loans to the sector.
The initiative, which is the brainchild of the CBN, the Bankers’ Committee and the Federal Ministry of Agriculture and Rural Development (FMARD), seeks to create incentives and catalyse processes that will encourage the growth of formal credit, direct and indirect, for the agriculture value chain. This, the CBN said is key in driving wealth creation among value chain participants.