“Agriculture is Big Business” says UBA CEO

Posted by African Examiner Agriculture, Banking & Finance, Business News, Press Releases Tuesday, September 10th, 2013

Lagos, Nigeria; 06/09/2013: The capacity for businesses in the agricultural sector in Nigeria to engineer economic growth and sustainable development, generate employment and reduce poverty is the major reason for the UBA Group’s significant increase in lending to the sector. This was made known by the

Group Managing Director, UBA Mr. Phillips Oduoza

, GMD/CEO at the just concluded 19th Nigeria Economic Summit in Abuja .

Speaking during a panel discussion on financing Agribusiness to guarantee successful industry transformation Oduoza said, “UBA currently has a minimum of seven percent of its gross loan portfolio in the agribusiness sector. Our total intervention in the sector is over N41bn, making UBA one of the largest financiers of agricultural projects in the country”.

Citing the bank’s experience he revealed that the risks in financing agribusinesses are low. According to him, UBA’s Non-Performing Loans (NPL) in its agricultural lending portfolio is as low as 0.06 percent. The rate is the lowest in the industry, and underscores the monitoring mechanisms put in place by the Bank as well as the readiness of farmers to repay their loans, with adequate monitoring and risk mitigation.

To further boost productivity in the agribusiness value chain, Oduoza advocated for necessary interventions across all value chains in the sector, in order for Nigeria’s potential in the sector to materialize. “In UBA, our financing of activities in the agribusiness sector cut across the value chain, from production, to storage, processing, distribution and even transportation. We strongly believe that for Nigeria to see growth in the agricultural sector, interventions must be total across all the value chain,” Oduoza said

The value chain financing approach adopted by the UBA Group is to ensure that maximum benefits are derived from all participants in the agribusiness line. The strength of the value chain is as good as its weakest link. So, everyone must be considered from the farmer in the village to the process that will transfer the goods to the consumer in town in whatever form and put money back in the hands of the farmer, he explained. “Once the entire value chain is looked at, agriculture becomes very profitable and a very good business for financial institutions to key into,” he noted.

Adesina Akinwumi, the Minister of Agriculture, used the opportunity of the panel discussion to appreciate the role being played by UBA in its finance of key projects in the agribusiness sector. He was particularly impressed by the low rate of defaults by farmers who accessed the agribusiness loans through UBA. He advised other financial institutions to emulate the strategies put in place by UBA.

The UBA Group remains a highly diversified financial services provider, the leading player in three different markets and controlling significant market share in 19 different African countries. The Group has a strong retail franchise across the continent offering its more than seven million customers a bouquet of products and services tailored to meet their different financial needs. The UBA Group also has business offices in New York , Paris and London , serving more than seven million customers from its 700 business offices spread across the 22 countries.

Thanks

Charles Aigbe

Divisional Head, Marketing & Corporate Relations Directorate

United Bank for Africa Plc|UBA House (3rd Floor)