Nigerian Banks Lift Agriculture Sector with N4.68trn in 5yrs-Report

Samuel Mobolaji

Nigerian banks extended a substantial N4.68 trillion in loans to the agricultural sector between 2018 and 2022, according to a report released by Alford Conferences Limited.

The report, titled ‘Commercial Bank lending to the Nigerian Agricultural Industry 2018-2022’, highlights the crucial role of the banking sector in bolstering the country’s agriculture industry.

Speaking about the report, Frederick Apeji, CEO of Alford Conferences, emphasized the importance of increased banking support for agriculture as part of preparations for the upcoming ‘Nigerian Food Surplus Summit’.

This summit aims to promote commercial farming, food processing, and agricultural machinery production across Nigeria’s 36 states and the Federal Capital Territory (FCT).

Apeji highlighted that these efforts are vital for Nigeria’s self-sufficiency in food production and creating a surplus for export.

“We advocate that Nigeria’s commercial banking sector should seek creative ways to increase the share of its loan portfolio devoted to growing the country’s agricultural industry in the years ahead, beyond the 5.03 per cent that it gave to the industry during the period under review,” Apeji stated.

He also called for closer collaboration between state governments and banks to attract funding for viable agricultural projects.

The report’s findings underscore the critical role of Nigeria’s banking sector in supporting agriculture. It compared the N4.68 trillion in agricultural loans to the N8.18 trillion in internally generated revenue (IGR) raised collectively by the 36 states and the FCT over the same five-year period.

The report also referenced the N1.12 trillion Anchor Borrowers Fund established by the Central Bank of Nigeria (CBN) to support smallholder farmers.

Focusing on banks with significant loan portfolios, the report identified 12 major players, including Access Holdings Plc, Zenith Bank Plc, FBN Holdings Plc, and United Bank for Africa Plc, and Guaranty Trust Holding Company Plc.

Access Holdings emerged as the top lender in Nigeria during this period, with a total loan portfolio of N17.386 trillion, of which N928.55 billion was allocated to the agricultural sector. Zenith Bank followed, lending N14.278 trillion overall and N873.36 billion to agriculture.

Ecobank Nigeria stood out by dedicating the highest percentage of its total loans to agriculture, allocating 12.28 per cent (N574.69 billion) to the sector.

Sterling Bank and First City Monument Bank (FCMB) also showed strong commitment, with 8.19 per cent and 7.58 per cent of their loan portfolios directed towards agriculture, respectively. These figures are significantly higher than the industry average of 5.03 per cent.

“Though small players in the banking industry, Sterling Bank and FCMB have shown exemplary support for agriculture, which remains the largest employer of labour in Nigeria,” Apeji noted.

Other banks surpassing the industry average include Zenith Bank (6.12%), Access Holdings (5.4%), and Stanbic IBTC Holdings Plc (5.33%).

The report highlights the need for continued and increased financial support for agriculture to ensure Nigeria’s food security and economic stability.

As the sector continues to evolve, partnerships between banks, government bodies, and agricultural stakeholders will be essential to sustain growth and innovation.