Dr. Kabiru Adamu, Managing Director, Bank of Agriculture (BoA) on Thursday said the bank’s targeted N250 billion recapitalization funds would focus mainly on supporting smallholder farmers in the country.
Adamu who disclosed this during a press conference in Kaduna said that the bank was in its final stage of restructuring which would massively attract global funds and investors.
He said that the recapitalization process would be completed in the next 14 weeks.
The managing director had earlier received a team from Lead Capital Consortium, whom the Federal Government mandated to restructure the bank.
He assured of the bank’s capacity to provide financial support to smallholder farmers across the country through its 140 branches.
“The Bank has been in existences for over 40 years, throughout this period that the bank existed, it had impacted positively on the agricultural sector of the country.
“Let me make it very clear that the bank is sound, solid and it’s carrying out its mandate without any problem.
“From the strategic point, the bank has six zonal offices located along the six geopolitical zones and over 140 branches across Nigeria.
“And the focus of the branches is to support the small holder farmer, which is the core mandate of the bank.
“We have lending capacity to our category of customers (Small Holder Farmers) at single digit of nine per cent and no bank in Nigeria has sustained that effort apart from bank of agriculture,“ Adamu said.
It is recalled that President Muhammadu Buhari in 2017 appointed the Dr. Kabiru Adamu-led management with a mandate to restructure and recapitalize the bank for effective service delivery and offer loan at a single digit to smallholder farmers.
The measure, the President said, was part of his diversification policy which is to increase production in the agriculture sector for food security and export.
Adamu, however, said the bank had faced different challenges over the years, making it difficult to achieve the desired results without restructuring.
“So far, the bank was faced with so many challenges over the years. The staffs have not been trained in modern agric finance system since it was established in 1972 and therefore we need to do that.
“The staffs that have been recruited as contract staff for too long have not been confirmed, we need to look at that.“
According to him, the bank also lacked capacity in loan recovery.
“Every other segment of the bank needs to increase capacity in that regard.
“We have so far strengthened the risk management group to make it more responsive to customer need and also to make it friendly to customer transaction in a manner that whatever has been disbursed is recovered at the end of the day.”
He said most of the challenges including that of Information Technology (IT) infrastructure would be addressed with funds from this exercise.
“There is a need to generate funds that will make the bank more competitive in the industry and in the world.
“The bank does not rely on customers’ deposits to finance its activities, there are also development partners ready and waiting for the exercise to be completed.
“We have been collaborating with several development partners who are ready to support the bank in agric mechanization, that means they would provide funding on that aspect.
“We have signed an agreement with DGK in Poland, who are ready to pump in funds.
“We have been to another bank in Brazil, DMDS which is in partnership with the Federal government and are planning to provide $2 billion loan to address the issue of mechanization.
“Why mechanization is important is because the traditional way of doing farming can no longer hold, so there is the need to imbibe the culture of modern agric practices, we have done a lot on that,” Adamu said.
He said the bank would complete the process of restructuring within the next 14 weeks and would be recapitalized targeting between N200 billion and N250 billion to provide single digit loan at nine per cent.
Mr. Wale Adewumi, Managing Director of Lead Capital PLC, said Federal Government had appointed the Consortium to restructure the bank.
Adewumi said the exercise would be completed within 14 weeks and would provide policy advice to ensure good corporate governance of the bank.
He said that the Agriculture sector which contributed 24 per cent to the economy and largest employer of labor would be the main focus of the bank.
According to him, the bank will receive fresh financing with a new CBN license that would allow the institution to offer full rural banking services.
“The new capital to be injected into the bank would come from the public aside the initial capital from the federal government.“
Adewumi assured that the exercise would inject more capable hands with modern banking and finance system experience who would add tremendous value to the bank.
He said the exercise which would bring in new IT based innovations, would attract more funding and investments.
Adewumi assured that those affected by the exercise would be adequately compensated.
Meanwhile, the bank said it had so far provided over N82 billion as loans under the CBN Anchor Borrowers Scheme to farmers since 2016 when the scheme was launched.
