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| From Left: Executive Directors, Bank of Agriculture Ltd (BOA), Muhammad Adamu; Babatunde Igun, and IFAD Country Programme Manager, Atsuko Toda |
The Initiative seeks to strengthen Micro Finance Banks (MFBs) and other member-based Micro Finance Institutions (MFIs) in such a way as to enhance access of the rural population to the financial services of these institutions in order to expand and improve agricultural productivity and Macro-Small Rural Enterprises (MSREs).
Given its mandate, IFAD had instituted the Rural Finance Institution Building Programme (RUFIN) with a loan agreement of US$27.2 million between it and the Federal Government in order to alleviate poverty with a particular focus on rural poor, especially women, the youth, and the physically disadvantaged.
Speaking with newsmen in Kaduna during the stakeholders meeting, the Executive Director of BOA, Mr Babatunde Igun said “as part of ways of enhancing our resources, we partner with various organisations, government and international institutions. We are here today to witness a top level discussion between us and one of our partners – IFAD under a programme called Rural Business Initiative (RBI) which is anchored by the Federal Ministry of Agriculture and the Central Bank of Nigeria. BOA is one of the key institutions providing the basics for the implementation of this project. Currently we have BOARBI and we are putting plans in place which will enable us reach the poorest of the poor in the rural areas.
“The general impression in Nigeria or anywhere is that the rural dwellers are poor – the rural poor and the urban poor. This programme is to introduce the poorest of the poor to access micro-credit with some as low as five thousand naira to ten thousand naira with which they can do businesses as this will help to deepen financial inclusion which is one of the programmes of the Federal Government.
The programme is being implemented alongside three participating institutions namely: the Bank of Agriculture (B0A) Ltd, Central Bank of Nigeria (CBN), and the Federal Department of Cooperatives (FDC),” Igun said. “We use peer pressure that is why we are encouraging them to be in groups.” On the interest rate, he said “interest rate is just about 2.5 percent and the loan is collateral free.”
According to IFAD Country Programme Manager for RUFIN, Atsuko Toda, BOA has its usual lending operation in the rural areas. “BOARBI is a special initiative where we promote a much more interactive interface with the rural population. We will have smaller loans as entry level and we will work with groups ensuring we closely monitor repayment. The whole idea is to build the trust between the BOA and its clients in the rural areas through the Rural Business Initiative.
“Our projection is that if we can establish a relationship with trust, using the rural business plan we can extend financial services through the rural area, as financial inclusion in rural area is still a massive challenge. There are 40 million people who are bankable at the moment and currently the bank of agriculture has 350,000 clients in the rural area, which is just a drop in the water. We believe that the bank of agriculture can play a much larger role to reach out to this rural population,” Toda said.
It is important to stress here that the objective of the programme is to develop and strengthen member-based MFIs and establish linkages between them and the other formal financial institutions in order to expand and improve agricultural productivity and boost micro/small rural enterprises.
It is estimated that about 345, 00 households of which at least 138, 000 (40 %) will be households with a woman as head will benefit directly from the programme. These families include smallholder farms and rural entrepreneurs such as farmers, craftsmen and petty traders, women, the physically challenged and the youth.
The programme covers 12 states which include: Adamawa, Bauchi, Kastina, Zamfara, Benue, Nasarawa, Lagos, Oyo, Anambra, Imo, Akwa Ibom and Edo.
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