The federal government has unusually widened its scope of financial interventions to Small and Medium Enterprises in the agricultural sector. Yet, many players are caught in the web of inaccessibility. But the Lagos Chamber of Commerce and Industry (LCCI) Agriculture and Agro-Allied Group recently veered into demystifying the procedural aspects of accessing the Central Bank of Nigeria’s current scheme, which is providing about N2billion to individual enterprises. TEMITAYO AYETOTO reports.
Okanlawon Oladipo had barely grasped his breath when he rushed to join the long queue of farmers, agric-entrepreneurs from different value chains as well as intending players waiting to register their presence at the sensitization programme on how to access the current Central Bank of Nigeria’s loan to agri-business and small and medium enterprises (SMEs) at the LCCI Exhibition and Conference Centre, Ikeja.
The hall was already occupied to the brim that he struggled to grab a standing position at the end of the hall. He abandoned all other activities at his Ibara, Abeokuta farm in Ogun state, when he learnt that he could access at least N10 million loan for his business.
His long time dream has been to raise enough funds for the expansion of his watermelon, cassava and maize farm; but that has been far from fruition as he continues to heavily rely on manual methods and labourers for his production.
“Capital is an issue for me. This period, we go on mechanical farming and we need different implements to ease our job. These days, we apply fertilizers and other inputs to enhance our produce and make it more lucrative. For instance, for hectares of farm land, we hire the services of manual labourers, yet they can’t do it all. Nowadays, planting of cassava and maize can be done with the aid of machines, but we have the challenge of capital. A crop like cassava is cost effective but if we can access the loan of about N10 million, I can purchase a tractor of perhaps N3.5million among other things and even lease it to other farmers,” Oladipo explained.
Raji Ololade, the helms man at Osakpi Farms, Epe was also there for the same purpose. Having trained at one of the biggest poultries in Osogbo, Tuns Farm, two years ago, he decided to establish his poultry business in Epe. He was fortunate enough to garner about N13 million from personal savings, family and friends support and has a grip of the Lagos market for his produce. But his goal to supply the behemoths in the country’s food industry and click national contracts for poultry products remains constrained, because of the lack of requisite funding for expansion.
“I have been very challenged in terms of accessing fund. I have tried many options at the local, state and federal level to get the funds said to be available from the government purse to no avail. But I’m hoping to learn how to do it right. Maybe, there is something I’ve not been doing. If I have the opportunity to grow bigger, it will not only serve the purpose of expansion but create job opportunities for more people. There are various smart technologies that can help my business better but which the capacity isn’t there for now,” Ololade said. The duo, like many others, were lost as to the feasibility of obtaining the widely promoted government interventions. In spite of the increasing funding windows, not many testimonies have come from the southwest as some observers believe the accessibility of these loans are over-politicised, making the scheme evade its intended purpose. This, among other needs, is why the LCCI decided to ensure farmers in the region do not miss out on the opportunity.
According to Tunji Falade, the chairman of the LCCI Agriculture and Agro-Allied Group, Nigeria is in desperate need of accelerated development, which could be effected through the facilitation of agric-business and small and medium scale enterprises. He explained that the group was looking at a situation where its members, as well as, members of the public would begin to position themselves and their businesses to access the intervention fund of the CBN.
Explaining some of the intricacies to finance access, Falade said: “You must be able to demonstrate that you are a going concern; that is a registered business in Nigeria. Of course, they would want to know about your CAC registration documents, see your business plan to see that you actually understand your business and how you are going to pay back; they want to see your tax profile, your financials in terms of audited payments and those basic things that a good SME should be able to provide. Most of them don’t keeps records and don’t have documents to prove their existence and to tell a story about how their business is doing, but this training will educate them on how to do that. Your business must have adequate records that will tell whoever is reviewing your facility that your business is on ground. If you are able to do the documentation very well, there will be fewer problems.”
He further pointed out the need for individual businesses to join organised private sector bodies like the LCCI among others because recognized bodies that help you to structure business and provide higher chance of getting support. Bunmi Kole-Dawodu, the Ogun state head, Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), taking the participants through the rules of the game, said many potential businesses fail in their bid to get bigger loans for expansion primarily because the articulation of their business concept and activities fail to project the possibility of profitability and repayment ability.
Farmers and business owners in agriculture must also understand the need for registration with the CAC, a steady market for their produce and a bankable proposal which development banks can rely on, he said, noting that many banks shy away from supporting agricultural enterprise because of the long period exhausted in awaiting harvest and onward sale.
“Investing in agriculture is a long term investment that most financial institutions don’t like doing because they don’t get their monies back within stipulated periods and we find some agricultural products that take seven months of even a year to grow. What we did when the CBN decided to include farmers in this programme was to see it as an opportunity to invite farmers to understand that this one, particularly, focused on them and they can use that opportunity,” he said.
The facilitator who also commended the CBN for giving farmers a robust inclusion in its loan scheme urged the bank to soften the conditions of access for farmers and SMEs to really take advantage of the programme. Speaking on the need to make the importation of agricultural machinery less stringent, he raised the need for the government to encourage the development of local fabrication of the farm implements saying it also expands opportunities for local manufacturers.
He said: “we should look at developing local contents. Local fabricators can fabricate our machines, which is better than spending the loan on importing some of the equipment. Again, if we import, how about maintaining them?” Although local fabrication is still at infancy in Nigeria, the federal government in 2017 recognised 50 major players in process machinery and equipment manufacturing in Nigeria. This, according to the government, was part of its diversification efforts to enhance commercialisation of agricultural value chains and conserve foreign exchange through patronage of locally fabricated processing machineries and equipment, reducing the importation of such machineries and equipment mainly from China and India.