‘Integrate Microfinance Banks in Rural Agric Finance for Improved Credit Access’

Senator representing Enugu North district at the National Assembly, Okey Ezea, has advocated for the integration of microfinance banks into the disbursement of agricultural and rural credit programmes for improved access to rural finance.

The senator who was speaking at a forum in Nsukka, Enugu State, to inform his constituents about some of his constituency projects and reveal his legislative agenda, said that the inclusion of microfinance banks in the disbursement of agricultural credits will eliminate the hijack of such funds 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 (NARDB), 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.

“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 (NARDB). 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,” Senator Ezea said.