Stakeholders in the agricultural sector have called on the Federal Government to restructure the Bank of Agriculture (BOA) so as to reposition it to respond effectively to emerging challenges.
They made the call on Tuesday in Lagos in separate interviews with News Agency of Nigeria (NAN) during the Project Completion Review (PCR) of the Rural Finance Institution Building Programme (RUFIN).
Dr Steve Ogidan, RUFIN Consultant and PCR Team Leader, said that the bank’s restructuring had become imperative to enable it to compete favorably with other lending institutions.
“The exercise is very urgent because the bank is not fitting into any of the financial institutions’ operations; BOA lacks the capacity to operate freely like other banks.
“For it to be farmers-friendly, the bank must operate to the full capacity; it must have the ability to respond favorably to the challenges of the 21stCentury,’’ he said. Ogidan stressed that for the bank to be effective, it must be independent, while doing away with archaic financial policies.
“The structure of the bank has not allowed the micro-finance system to be effective in all the bank’s branches across the country,’’ he added. The consultant said that each of the BOA branches should be allowed to operate as an independent Micro-Finance Institution (MFI), adding that the arrangement would enable the branches to be sustainable.
“BOA should be reorganised; it should use its strength and presence across rural areas in the country to deepen financial inclusion for rural households across the country,’’ he said.
Ogidan called on the management of the bank to ensure that the bank became Information Technology-compliant in all its rural branches, adding that the bank should jettison the analogue system of operations.
Mr Olusina Sobande, Data Management Officer in the Lagos Office of RUFIN, said that going by the manual of RUFIN project, BOA and Central Bank of Nigeria (CBN) were partners in the business, while MFBs were only collaborators.
He also underscored the need for BOA to be IT-compliant so as to enable it to perform creditably well like other financial institutions. “For any farmer to have access to loans, such farmer must look for a top civil servant to sign the loan forms as a guarantor. “However, under RUFIN, all that is needed is for an official of the programme to be your guarantor; even at that it does not work.
“All applications from the local government areas must get to the BOA office at the state capital before they are transferred to the headquarters in Kaduna, and this will take another three months,’’ he said. Sobande, however, said that even though BOA had good credit facilities for farmers, the bank, nonetheless, had no serious considerations for the planting season.
“Most times, when the money comes, it might not be useful for crop growing in the planting season, so the bank needs a lot of re-engineering to enable it to meet the farmers’ challenges,’’ he said. Mr Akin Ogunsola, a farmer, said that BOA had not been able to meet the farmers’ demands like other banks.
He said that for its operations to be effective, BOA should perform operations that were akin to those of micro finance banks, while its management should reorganise its working processes. Ogunsola, however, noted that the bank branches lacked the capacity to develop suitable products for people in the rural areas.
“The branches of the bank need to move away from the strings of the head office and operate as independent Micro Finance Institutions (MFIs),’’ he said.
Some of the farmers also said that the bank was not moving with time, as it had failed to introduce innovative products for them.
Mr Michel Igbafa, a farmer and RUFIN beneficiary in Agbowa Ikosi, Lagos, said that the bank had not been customer-friendly, adding that it had not been addressing the plight of customers with the deserved attention at all times.
Mr Imire Uzezi, another farmer from Agbowa Ikosi, noted that due to the fact that the branches of the bank were not operating independently, there had been serious delays in the release of funds.
“Before the bank could approve a N10,000 loan, it must get approval from the head office, and this could take a month, which is inimical to a farmer’s working plans,’’ he said.
Mrs Oluwakemi Ayodele, a cash crop farmer in Mataku, Epe, Lagos, said that BOA, with its attractive packages, had not duly sensitised farmers to the benefits of the packages.
She urged the Federal Government to strengthen BOA and lay a foundation for the development of a sustainable financial system which would be beneficial to farmers.
Ayodele said that the bank, in line with global best practices, should look for creative ways of delivering financial services to rural farmers in a profitable and sustainable manner