The capacity for businesses in the agricultural sector
in Nigeria to engineer economic growth and sustainable development,
generate employment and reduce poverty is the major reason for the UBA Group’s
significant increase in lending to the sector. This was made known by the
Group Managing Director, UBA Mr. Phillips Oduoza, GMD/CEO at the just concluded
19th Nigeria Economic Summit in Abuja.
Speaking during a panel discussion on financing Agribusiness to
guarantee successful industry transformation Oduoza said, "UBA
currently has a minimum of seven percent of its gross loan portfolio in the
agribusiness sector. Our total intervention in the sector is over N41bn, making
UBA one of the largest financiers of agricultural projects in the country”.
Citing the bank’s experience he revealed that the risks in
financing agribusinesses are low. According to him, UBA's Non-Performing
Loans (NPL) in its agricultural lending portfolio is as low as 0.06 percent.
The rate is the lowest in the industry, and underscores the monitoring
mechanisms put in place by the Bank as well as the readiness of farmers to
repay their loans, with adequate monitoring and risk mitigation.
To further boost productivity in the agribusiness value chain,
Oduoza advocated for necessary interventions across all value chains in the
sector, in order for Nigeria’s potential in the sector to materialize.
“In UBA, our financing of activities in the agribusiness sector cut
across the value chain, from production, to storage, processing, distribution
and even transportation. We strongly believe that for Nigeria to see
growth in the agricultural sector, interventions must be total across all the
value chain,” Oduoza said
The value chain financing approach adopted by the UBA Group is
to ensure that maximum benefits are derived from all participants in the
agribusiness line. The strength of the value chain is as good as its weakest
link. So, everyone must be considered from the farmer in the village to the
process that will transfer the goods to the consumer in town in whatever form
and put money back in the hands of the farmer, he explained. “Once the entire
value chain is looked at, agriculture becomes very profitable and a very good
business for financial institutions to key into,” he noted.
Adesina Akinwumi, the Minister of Agriculture, used the
opportunity of the panel discussion to appreciate the role being played by UBA
in its finance of key projects in the agribusiness sector. He was particularly
impressed by the low rate of defaults by farmers who accessed the agribusiness
loans through UBA. He advised other financial institutions to emulate the
strategies put in place by UBA.
The UBA Group remains a highly diversified financial services
provider, the leading player in three different markets and controlling
significant market share in 19 different African countries. The Group has a
strong retail franchise across the continent offering its more than seven
million customers a bouquet of products and services tailored to meet their
different financial needs. The UBA Group also has business offices in New
York, Paris and London, serving more than seven million
customers from its 700 business offices spread across the 22 countries.
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