Daud Olatunji
The Lift Above Poverty (LAPO) Micro-Finance has raised concerns about the alarming inconsistency in the repayment of loans by farmers, which it says poses a significant challenge to the agricultural sector.
This revelation came to light during a stakeholders’ meeting organized by the International Fund for Agricultural Development (IFAD) in Makurdi, which aimed to address issues related to agricultural financing.
Susan Adoga, a Loan Recovery Officer at LAPO Micro-Finance, highlighted the pressing issue during the meeting held on Monday.
She expressed her worry, stating that a significant number of farmers fail to fulfill their loan repayment obligations, creating uncertainty and financial risks for lending institutions.
This situation has led to a reluctance among money-lending institutions to invest their resources in supporting farmers, whether through cash loans, agricultural implements, or farm inputs.
Meanwhile, the IFAD-Value Chain Development Programme (VCDP) Rural Finance Officer, Rosemary Lorngirim, offered valuable advice to farmers to tackle this issue effectively.
Lorngirim stressed the importance of utilizing the loans for the intended purpose, which is to improve and invest in farming activities rather than diverting the funds to other ventures.
She emphasized that by investing in farming, farmers can generate the income needed to repay loans on time and, furthermore, become eligible for higher loan amounts to expand and enhance their agricultural businesses.
Lorngirim also emphasized the significance of insuring farms against natural disasters, encouraging farmers to safeguard their investments.
This strategy allows them to seek indemnity from insurance firms in the event of unexpected disasters and circumstances, thereby mitigating financial losses.
Furthermore, Iorngirim encouraged farmers to form partnerships with off-takers and financial institutions for their mutual benefit.
She explained that partnerships harness institutional capabilities and human resources, combining skills, experiences, and ideas to tackle common issues that often surpass the capacity of a single entity or group.
In conclusion, addressing the problem of inconsistent loan repayments by farmers in Nigeria’s agricultural sector is essential for sustainable development.
LAPO Micro-Finance, IFAD, and other stakeholders are working together to provide guidance, financial literacy, and support to farmers to improve their loan repayment records, ensuring that the agricultural sector thrives and contributes to economic growth.
It remains to be seen how these initiatives will impact the farming community and the broader agricultural landscape in the region.
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