Dr Usman Bugaje, Convener, Arewa Research and Development Project (ARDP), has said that over 90 per cent of smallholder farmers in Nigeria did not access loan facilities from conventional banks.
Bugaje made this known at the opening of 2nd Special Training Workshop on Agricultural Islamic Finance at the Postgraduate School of Ahmadu Bello University (ABU), Zaria, Kaduna State.
The News Agency of Nigeria (NAN) reports that the workshop was meant to boost the revenue base of smallholder farmers at the grassroots by enabling them access loans with neither collateral nor interest.
He attributed the problem to prerequisite (collateral) attached to loan scheme that must be met before enjoying the facility, adding that such prerequisite had often disqualified most of the grassroots farmers.
‘’In Nigeria, reports have shown that over 90 per cent of our smallholder farmers, who actually need assistance, do not access loans from conventional banks.
“However, it is discovered globally that the Agricultural Islamic Finance is the only sure way that would genuinely guarantee these people access to loan without the unnecessary protocols.
“The loan,if accessed, will enable the smallholder farmers boost their productivity, enhance revenue base and increase the nation’s Gross Domestic Product (GDP),” he said.
The convener explained that the new scheme,not meant for Muslims alone, was tested in many countries and found to be the best alternative to conventional banking system.
Bugaje explained further that the new scheme also allowed profit and loss to be shared according to agreed ratio.
He said ARDP was a development platform created about seven years ago to ensure sustainable financial development of smallholder farmers in the country at large, and Northern Nigeria in particular.
“Nigeria returned to democratic government in 1999, but eight years after, we discovered that in spite the large amount of unprecedented revenue realised from oil, actually, poverty doubled.
“As we moved on, we discovered that our politics is becoming increasingly empty, it was not delivering, poverty was growing, conflict was increasing and there were other problems.
“So, we decided to bring in academic people with public service experience and people who have passion for reform and development of this country, on how to really address the problems.’’
He said the first thing they did was to create a development agenda that focused on agriculture being one sector that had the capacity to provide jobs and also create wealth.
The convener added that it was the reason why they decided to link up with different institutions in the country, to be able to overcome the constraints.
The Chairman of the occasion, Maj.-Gen. Paul Tarfa (Rtd), said the workshop should have been organised much earlier than now, in view of its importance, not only to smallholder farmers but also to the entire nation.
Tarfa identified finance as the major problem of agricultural development in Nigeria, in spite the efforts of government in disbursing loans to farmers.
“But with this move, I believe many will enjoy the gesture which I know is interest-free.
“I urge the participants to take advantage of the workshop and ensure that they disseminate the information acquired to others.”
The Secretary, African Rural and Agricultural Credit Association (AFRACA), Saleh Usman-Gashua, said the organisation was a heterogeneous network, established in 1977 with the mandate of developing inclusive development finance.
“Our mandate is to make sure that everyone has access to sustainable financial services.
”It is not only limited to credit, but we are also looking into payments, insurance transfers and encouraging savings among others.
“Just like in Kenya where I stay, the number of underserved or unreached sector has reduced significantly, using ICT.
‘’We have what we call agency banking, whereby you can pay your loans and can get access to finances.
“We also have what we call ‘impessa’ where you can transact business in billions of Kenya shillings in a day.
‘’We have also ‘m-sure’ where you can give loans, recover loans within 24 hours without knowing even where your bank is.’’
Prof. Ibrahim Garba, the Vice-Chancellor of ABU, described the institution as the home of agriculture in the country.
According to him, ABU, Zaria is the host of three important agricultural institutes with national mandate of agricultural research and development.
“ABU hosts the Institute for Agricultural Research (IAR), National Agricultural Exension Research and Liaison Services (NAERLS), National Animal Production Research Institute (NAPRI) and Division of Agricultural Colleges (DAC).
“With all these institutes, there is no better place to hold this workshop in Nigeria than ABU, therefore, the choice of this institution is not by accident,” he said.
The workshop drew facilitators and participants from Kenya, Togo, Ghana and Uganda, the Central Bank of Nigeria (CBN) as well as commercial banks among others.