Senator urges MFBs integration for agric credit access

The lawmaker representing Enugu North Senatorial District, Okechukwu Ezea, has called for the integration of microfinance banks into the disbursement of agricultural and rural credit programmes for improved access to rural finance.

Ezea said this during a recent constituency meeting in Nsukka, Enugu State.

Recent data from the Central Bank of Nigeria revealed that 95.66 per cent of bank debtors borrowed from microfinance banks as of September 2024. Out of the 6,537 total debtors recorded across all creditor types, 6,253 were linked to MFBs, reflecting their pivotal role in providing access to credit.

Speaking at the forum, Ezea said that the inclusion of microfinance banks in the disbursement of agricultural credits will eliminate funds hijacked by politicians and their cronies who prevent real farmers and rural investors from accessing such funds.

He also said the business orientation of MFBs will help prevent repayment failures that have led to the failure of similar programmes in the past.

Citing the example of the Nigerian Agricultural Cooperative and Rural Development Bank, which, according to him, has had limited successes as a result of political hijacks and repayment failures, Senator Ezea recommended that the involvement of MFBs as disbursement agents will ensure proper tracking of disbursements and enforcement of repayments to ensure that the funds achieve the targeted development multipliers.

He said, “The federal government has, in the past, created some special-purpose finance vehicles to drive investments in rural agriculture and other enterprises.

One of them is the Nigerian Agricultural Cooperative and Rural Development Bank. This special bank was designed to provide single-digit credit to rural farmers and businesses. I do not know how effective they have become, but there is evidence that a lot needs to be done to make its impact felt.

“The first thing to do is to redesign the disbursement methods by making the thriving microfinance banks spread all over the country the disbursement channels. This will eliminate the situations where such special funds are hijacked by politicians and their cronies. It will also ensure improved repayment frequencies and costs because it is the MFBs that will work out repayment plans, failing which they will be excluded from future disbursements.”

He said when this is supported by the provision of appropriate infrastructure such as roads, rural development will spike and result in a boost in the country’s gross domestic product by as much as 30 per cent.

“One thing that governments at the federal, state, and local levels should do is to be deliberate about the provision of infrastructure in the rural areas. Roads are important, so also are agricultural inputs. This was why in my constituency projects, I am paying attention to the construction of rural farm roads, provision of fertilisers, and other items that enable farming. Our intervention was chiefly to point towards the direction of what we believe should be the area of greater national priorities, and that is why I believe the government at all tiers should shift attention to rural economic exploitation through the provision of access roads, potable water, and other tangible and intangible amenities,” he said.