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BoI, development partners seal N10bn loan deal for SMEs in farming

The Bank of Industry (BoI) is set to step up seed money to Small and Medium Enterprises (SMEs) in agricultural sector this year as it seals Memorandum of Understanding (MoU) with three international development partners.

Major aspect of the agreement is the readiness of BoI to provide up to N10bn to the small holding farmers to boost employment and food security.

In his address during the signing ceremony, the Acting Managing Director of BoI, Mr. Waheed Olagunju, said the agreement has further confirmed the bank’s support for the development of the agriculture sector and readiness to grow food security in the country.

He said BoI will continue to assist SMEs as the sector remains the highest employer of labour especially in developing economies like Nigeria.

Explaining more Olagunju said the bank would provide up to N10bn exclusively for the acquisition of agro-equipment by either agricultural service providers or well-established farmers.

It would be recalled that the N10bn for the sector was the largest which the bank had earmarked for any programme. Part of the favourable condition attached to the loan is that the amount would be repaid within a five year period by beneficiaries at a nine per cent interest rate.

Also, micro enterprises would be able to access up to N10m; small enterprises, between N10m and N50m; while medium-scale entrepreneurs could access above N50m but not exceeding N500m.

According to him, “In recognition of the catalytic role that agro-processing plays in boosting good production, BoI, in collaboration with development partners, has designed a programme to provide finance for agro-equipment service providers and well-established farmers as well.

“It is envisaged that with better access to credit to fund acquisition of agro-equipment, there will be improved efficiency and production output in the agricultural sector.

“A N10bn fund has been earmarked for the acquisition of agro-equipment and it is the largest amount of money that the bank has earmarked for any programme and this is a testimony to the importance of agro-mechanisation in economic development of Nigeria.”

BoI is targeting to create about 10,000 direct jobs and 30,000 indirect jobs, making a total of 40,000 jobs within the period of the facility administration.