Heritage Bank, strenghtening Nigeria’s agricultural sector

In the first half of this year, the African Development Bank Board approved a US$15 million equity investment in Africa Food Security Fund (AFSF). It was an effort to boost agri-business and enhance food security; support enterprises in agri-business and enhance food security in Africa.

This underscores the need for increased food production, especially as rising population has kept demand for food on a steady growth, forcing countries to invest heavily in agriculture.

In Nigeria, with access to finance still a major challenge, agriculture remains underdeveloped with majority of farmers in the rural areas still practising subsistence farming.

However, to increase funding for the agricultural sector, the Central Bank of Nigeria (CBN), in line with its developmental functions and in collaboration with the Federal Government and Nigerian banks established various agricultural schemes as a way of bridging the funding gap.

Such interventions include the Commercial Agriculture Credit Scheme (CACS), Commercial Agriculture Development Programme (CADP), the Interest Draw-back scheme, Agricultural Credit Support Scheme, as well as the recently introduced Anchor Borrowers’ Programme (ABP).

The broad objectives of most of the schemes are to fast track development of the agricultural sector by providing credit facilities to commercial agricultural enterprises at a single digit interest rate; enhance national food security by increasing food supply and effecting lower agricultural produce as well as product prices, thereby promoting low food inflation; generating employment and diversifying revenue base.

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In complimenting the efforts of the Central Bank, Heritage Bank Plc has made a huge success of the schemes by making funds available to both individuals and corporate organisations in their efforts to increase agricultural output.

The bank under the headship of Mr Ifie Sekibo, who is the Managing Director and Chief Executive Officer, has distinguished itself in financing critical agricultural projects in the country and, in the process, putting smiles on the faces of many farmers.

Since the five eventful years the bank opened  doors to customers, the showpiece of operations are a wide gamut of completed, on-going and nascent people-oriented programmes, create, preserve and transfer wealth across generations in the country.

This line of operation is steadily yielding great results as the nation continues to move its economic base towards a future, with robust emphasis on thoughts about diversification of the country’s economic base.

Heritage Bank’s agricultural intervention initiatives

With the increasing recognition of agriculture as the ‘beautiful bride’ of Nigeria’s economy, Heritage Bank has continued to make relentless efforts in agricultural financing which is fast gaining new interests and more attention within the business circles. As agriculture continues to be business, financing provides tremendous opportunities for lenders and borrowers, either at small or large scale.

Heritage Bank has not only encouraged both government, corporate and individual (including young people to embrace optimal productivity and greatness in this sector), it has taken the front seat in the drive to support them in the attainment of noble agricultural virtues by funding various agricultural projects in several states in the country, especially in Oyo, Kaduna and Zamfara states.

This line of action has readily compelled young and vibrant minds into getting involved in providing affordable financial solutions that can help agribusiness investors in various aspects of agriculture.

Presently, the bank is involved in preparing a good future for the youth, whilst recognising the need to expand the horizon of young people, and increase their choices. The institution realized that the youth are needed as solution providers, incubators of ideas, promoters of innovations and implementers of positive change through agriculture and entrepreneurship.

However, five years of the bank’s existence have promoted renewed belief and a sense of pride in the identity of Nigeria, as a people and a country. Innate virtues of industriousness, illustriousness and entrepreneurship have been reawakened, as the youth and people have risen massively to embrace legitimate hard work in the agricultural sector as against indolence, dependence on government and servitude.

In a bid to further support the real sector and unlock food potentials, Heritage Bank Plc in collaboration with CBN provided N2 billion long term facility under the Commercial Agriculture Credit Scheme (CACS) to Triton Aqua Africa Ltd (TAAL).

TAAL known as Triton Farm accessed the CACS through Heritage Bank, which was used to set up aquaculture businesses; nursery/hatchery to produce fingerlings and brood stock in Ikeja, earthen ponds for catfish and Tilapia in Asejire, Iwo and Gambari towns in Oyo State. The company’s strategy is to embrace backward integration through production of fish locally and reduce its importation of frozen fish and as well to assist small scale farms by producing quality breed fingerlings.

Under the arrangement, TAAL will also help small-scale farms increase their fish production by making fingerlings available to them. In the short term, the loan is expected to help Triton double its current production capacity of 25,000 metric tonnes with a projection to scale it up to 100,000 metric tonnes in five years.

The bank has also thrown its weight behind Globus Resources Limited, a subsidiary of Triton Group, to flag off the second phase of afforestation programme in Oyo State.

Nigeria’s current demand capacity for fish is estimated at 2.7 million metric tonnes and the country currently produces 800,000 metric tonnes. Triton is now producing 25,000 metric tonnes and with them on board, about 25,000 metric tonnes capacity will be added to Nigeria’s current production, even as the company’s projection is to reach 100,000 metric tonnes in five years.

Heritage Bank is in partnership with the Oyo State government in a multi-billion-naira project to give agriculture a boost. Under the initiative, the bank is supporting the Oyo State Agricultural Initiative (OYSAI), a programme designed to revive agriculture, boost agro-allied businesses and massive empowerment programme for both youth and women across the state through the creation of thousands of jobs in the sector.

This huge, albeit laudable, project that is spread across 3,000 hectares of land in 28 of the 33 local government areas of Oyo State,  is in three stages: food crop cultivation, cash crop/horticulture and food processing. Heritage Bank is supporting agro investors involved in this initiative with funds and advisory services. Therefore, indications are that the programme has already led to more than 30 per cent increase in food production in the state.

MD’s commitment /Bank’s  achievements

The Managing Director /Chief Executive Officer of the bank, Ifie Sekibo has been on the driving seat of the agricultural financing revolution.   He is committed to Heritage Bank’s financing initiatives.

“The bank would not relent in its efforts at boosting the agriculture base of the nation,” he said, affirming that Heritage Bank would continue to make farming profitable to stakeholders and attractive to the youth.

The bank, he said, would remain focused in supporting agribusiness through financing the purchase of modern technological equipment as it would bring about transformative development to the economy in general.

He said the bank will support the drive for cash crop commodities that would boost Nigeria’s foreign exchange earnings, which President Muhammadu Buhari’s administration has always been cautious, given the dangers the continuous reliance on imported food items pose to its efforts to create jobs as well as develop and diversify the economy.

For its enormous support to this sector, Heritage Bank Plc, was bestowed with the inaugural Nigeria Sustainable Banking Award convened by the CBN “for sustainable transaction of the year in agriculture.”

Again, organisers of the Nigeria Agriculture Awards (NAA), at its annual event convened by AgroNigeria (The Voice of Nigeria’s Agriculture), to appreciate immense efforts of those who have contributed to the success of agriculture sector in the country, announced Heritage Bank as the Agric. Bank of the Year.

According to NAA, Heritage Bank was selected in recognition of its footprints in the Agric. space, especially the Triton Aquaculture Project.

Partnerships

Heritage Bank has also supported thousands of small holder farms in Kaduna and Zamfara states. They benefited from the bank’s financial support for rice and soya beans production under the Central Bank of Nigeria’s Anchor Borrowers Programme (ABP).

Sekibo says that Heritage Bank is effectively tackling the bottlenecks since it has long identified the opportunities in agribusiness before the collapse of crude oil prices through its various programmes. This will contribute to the projection for year 2020 in the production of 7.7million metric tons of milled rice or 10.8million metric tons of paddy rice at milling recovery ratio of 62 percent.

On Heritage Bank’s involvement in ABP, the Bank provides on-lending funding to aggregated farmers to grow various produce that will serve as raw materials to the processors, thereby ensuring market linkages and access to market as well as reduce importation and conserve Nigeria’s external reserves.

In 2016, the sums of N54million and N248million were sourced from CBN and disbursed as loans to 185 rice farmers and 414 soya bean farmers respectively in Kaduna State.

In the same year, N37.995 million was disbursed to 259 rice farmers via 11 cooperatives in Zamfara State.

The Bank executed Memorandum of Understanding (MOU) for partnership with NIRSAL in 2017 with the following transactions already consummated.

Poultry farming in Oyo State – N29million received from NIRSAL and disbursed to farmers; Maize cultivation in Ogun State – N157million received from NIRSAL and disbursed to farmers;

Cassava cultivation in Kebbi State –  about N500million approved by CBN.

Heritage Bank currently participates in The National Home-Grown School Feeding Programme (“HGSFP)” only in Oyo State. The programme is coordinated from the National Office in conjunction with state office.

HGSFP is one of the Social Investment Programmes of the Federal Government of Nigeria. The programme aims to provide one free meal per day to pupils of government-owned primary schools. The programme currently caters for pupils in primary one (1) to three (3).

As at date, a total sum of N1.8billion has been received and disbursed to food vendors and suppliers for Oyo State

Over 1,500 cooks have been enrolled on BVN across the 33 Local Government Areas in Oyo state.

Over 3,000 accounts have been opened cooks/vendors 1,433 customised Oyo/HGSFP debit cards have been issued

The lender signed a N232 million pilot phase of out-growers agreement with Biase Plantations Limited (BPL), and its joint venture partner, PZ Wilmar Limited to produce best-in-class palm oil, using the ABP model. The first tranche of N113million has been received and disbursed accordingly. The pilot scheme covers 45 farmers, grouped into four co-operative societies with a land mass of 150 hectares, and the funds to be administered is from BPL.

Youths are also encouraged through the bank’s partnership with CBN under the Youth Innovative Entrepreneurship Development Programme (YIEDP) to start young and create wealth. From available statistics, 80 percent of applicants under the youth empowerment programme choose agriculture as the preferred sector.

It is in recognition of the bank’s track record in this regard that apparently influenced its selection by the CBN as its pilot partner for the execution of the N3billion YIEDP.

The programme is aimed at creating sustainable wealth and employment in the country with focus on dependable job creating sectors such as agricultural value chain (fish farming, poultry, snail farming), cottage industry, mining and solid minerals, creative industry (tourism, arts and crafts), and Information and ICT.

In the same vein, the bank supported NatnudO Foods, a food processing company in its determination to make poultry affordable and accessible for the people. It decided to partner with the company to ease the burden of poultry production in the country.Heritage Bank is supporting the company in funding infrastructural projects required to make agricultural business more productive for farmers in different parts of the country.

It partnered BKG Exhibitions Limited in  organizing Nigeria’s first ‘PalmTech Expo’ to catalyse resuscitation of the palm oil industry in Nigeria based on  rapid development and increasing contribution to the nation’s Gross Domestic Product (GDP). Consequently, 13 states in the palm oil producing states across the federation in conjunction with over 50 Nigerian and international companies were exhibitors at the expo. The bank also

partnered with the Nigerian Youth Professional Forum (NYPF) to support entrepreneurship in agricultural sector and others with the launch of a N500 million Young Entrepreneurs and Students (YES) grant. This is just as it equally partnered with Centre for Values in Leadership (CVL) to empower over 100 aspiring start-up entrepreneurs under the Young Entrepreneurship Business Training Programme (YEBTP).

“We have been playing strongly in the education and Small and Medium Scale Enterprises (SME) sectors of the economy. This project syncs with our mission and vision as a bank. The age bracket of 18 to 40 years for the beneficiaries also aligns with our corporate goal, just like the key sectors which include agriculture, ICT and creative industry, identified for the project are pivotal for economic growth,” Sekibo said.

Conclusion

Undeniably, most of the ventures in the agriculture sector fall within the Micro, Small and Medium Scale Enterprises (MSME) sectors of the economy, which Heritage Bank in close collaboration with CBN has been championing.

These feats according to the bank, will empower the people in addition to boosting Nigeria’s economic revival and leading the country’s foray into modern and sustained industrialization.

The many innovative supports by Heritage Bank across the country for growth of the productive sector in the agriculture, SME, entertainment and numerous spheres, point to Nigeria’s hitherto untapped rich human potentials.

The lender said it is not only actualizing its vision of partnering with individuals, organisations and governments to create, preserve and transfer wealth across generations, but is also playing a crucial role in helping to achieve the government’s ambition of diversifying the economy.