President Bola Ahmed Tinubu on Thursday, July 30, endorsed N550 billion in funding for the Bank of Agriculture to finance small holder farmers and stabilise food prices.
The BoA Managing Director, Ayotunde Sotinrin, disclosed this during an interactive session, saying N250 billion was provided to finance smallholder farmers through technology and proper controls, while another N300 billion was allocated to stabilise food prices under the Guaranteed Minimum Price scheme.
Sotinrin explained that BoA does not finance farmers directly but works through farmer aggregation companies, including AFEX, ThriveAgric and Arziki Noma.
According to him, the model is more efficient and reduces the risk of loan recovery.
On the Guaranteed Minimum Price scheme, Sotinrin said the bank was responsible for ensuring that food prices did not rise beyond a certain limit.
He said the funding would enable the bank to buy produce from farmers during harvest and release it into the market when necessary to stabilise prices.
Sotinrin revealed that about 500,000 farmers had so far benefited from the pilot phase of the programme.
He added that the bank used four per cent of the financing to insure the programme against losses that could arise from weather-related events.
Sotinrin said the bank had fully digitised its process for financing smallholder farmers and introduced a new bank card for beneficiaries.
He explained that through the wallet system, the government could load fertiliser, seeds and other farm inputs onto farmers’ wallets, allowing them to redeem the inputs at collection centres using point-of-sale terminals.
The BoA managing director also disclosed that the bank had introduced Know Your Farmer (KYF), using artificial intelligence to automate payments and track transactions involving farmer aggregation companies.
He said the system had removed the need for manual checking of millions of farmers’ accounts.
Sotinrin said BoA had undergone restructuring since he assumed office about a year ago.
He said the bank was previously operating like a government department with obsolete facilities, creating the need to restructure, recapitalise and refocus its operations.
He identified financing about 70 million smallholder farmers as one of the bank’s major challenges.
According to him, there is nowhere in the world where such a large number of farmers are financed directly, which informed the decision to work through farmer aggregators.
Speaking on the Ginger Revitalisation Programme, Sotinrin said about 4,000 farmers affected by ginger blight had been provided with disease-free ginger rhizomes.
He explained that for every bag distributed, farmers return three bags, which are taken to tissue culture laboratories to produce millions of disease-free seedlings.
He said the bank aims to increase ginger production from 500,000 tonnes to five million tonnes and raise revenue from $200 million to $ two billion.
Sotinrin added that the bank plans to expand ginger farming beyond the traditional producing states of Kaduna, Nasarawa and Plateau.
On mechanisation, Sotinrin said the bank was not distributing tractors directly to farmers but to service providers who would repay the loans through income generated from their operations.
He said the bank’s target was to deploy 2,000 tractors to provide mechanisation services to 1.2 million farmers.
To reduce post-harvest losses, he said the bank was introducing battery-powered cargo e-tricycles capable of carrying between 2,000kg and 3,000kg of produce from farm gates to warehouses.
Sotinrin also disclosed that the bank was creating one-stop-shop hubs in farming communities to provide services including tractor booking, input sales by original equipment manufacturers, produce aggregation and banking.
He said the hubs would make services more accessible to farmers while helping them build credit profiles.
“BOA is moving from the old BOA to ‘Bank of Agriculture 2.0’. Our focus is financing, technology, and solving foundational problems.
We are not a charity. We create impact through profitable and sustainable financing,” Sotinrin said. ance small holder farmers and stabilise food prices.
The BoA Managing Director, Ayotunde Sotinrin, disclosed this during an interactive session, saying N250 billion was provided to finance smallholder farmers through technology and proper controls, while another N300 billion was allocated to stabilise food prices under the Guaranteed Minimum Price scheme.
Sotinrin explained that BoA does not finance farmers directly but works through farmer aggregation companies, including AFEX, ThriveAgric and Arziki Noma.
According to him, the model is more efficient and reduces the risk of loan recovery.
On the Guaranteed Minimum Price scheme, Sotinrin said the bank was responsible for ensuring that food prices did not rise beyond a certain limit.
He said the funding would enable the bank to buy produce from farmers during harvest and release it into the market when necessary to stabilise prices.
Sotinrin revealed that about 500,000 farmers had so far benefited from the pilot phase of the programme.
He added that the bank used four per cent of the financing to insure the programme against losses that could arise from weather-related events.
Sotinrin said the bank had fully digitised its process for financing smallholder farmers and introduced a new bank card for beneficiaries.
He explained that through the wallet system, the government could load fertiliser, seeds and other farm inputs onto farmers’ wallets, allowing them to redeem the inputs at collection centres using point-of-sale terminals.
The BoA managing director also disclosed that the bank had introduced Know Your Farmer (KYF), using artificial intelligence to automate payments and track transactions involving farmer aggregation companies.
He said the system had removed the need for manual checking of millions of farmers’ accounts.
Sotinrin said BoA had undergone restructuring since he assumed office about a year ago.
He said the bank was previously operating like a government department with obsolete facilities, creating the need to restructure, recapitalise and refocus its operations.
He identified financing about 70 million smallholder farmers as one of the bank’s major challenges.
According to him, there is nowhere in the world where such a large number of farmers are financed directly, which informed the decision to work through farmer aggregators.
Speaking on the Ginger Revitalisation Programme, Sotinrin said about 4,000 farmers affected by ginger blight had been provided with disease-free ginger rhizomes.
He explained that for every bag distributed, farmers return three bags, which are taken to tissue culture laboratories to produce millions of disease-free seedlings.
He said the bank aims to increase ginger production from 500,000 tonnes to five million tonnes and raise revenue from $200 million to $ two billion.
Sotinrin added that the bank plans to expand ginger farming beyond the traditional producing states of Kaduna, Nasarawa and Plateau.
On mechanisation, Sotinrin said the bank was not distributing tractors directly to farmers but to service providers who would repay the loans through income generated from their operations.
He said the bank’s target was to deploy 2,000 tractors to provide mechanisation services to 1.2 million farmers.
To reduce post-harvest losses, he said the bank was introducing battery-powered cargo e-tricycles capable of carrying between 2,000kg and 3,000kg of produce from farm gates to warehouses.
Sotinrin also disclosed that the bank was creating one-stop-shop hubs in farming communities to provide services including tractor booking, input sales by original equipment manufacturers, produce aggregation and banking.
He said the hubs would make services more accessible to farmers while helping them build credit profiles.
“BOA is moving from the old BOA to ‘Bank of Agriculture 2.0’. Our focus is financing, technology, and solving foundational problems.
We are not a charity. We create impact through profitable and sustainable financing,” Sotinrin said.
