With the help of Mastercard and the Federal Government, one million farmers will be supported throughout the continent through financial inclusion and contactless payments.
Sen. Kashim Shettima, the Vice President, made this announcement following a meeting with Mastercard Executives outside of the 79th United Nations General Assembly (UNGA) in New York.
With financing from the African Development Bank, the project plan aims to assist one million agricultural laborers in Nigeria, Kenya, and Tanzania, with an emphasis on enhancing financial inclusion and offering digital access to vital services.
Continuing, In the course of the meeting, the Vice President—who was representing President Tinubu at the yearly international gathering—emphasized the initiative’s revolutionary potential to further Africa’s endeavors towards food security.
According to the Vice President: “This partnership is an important milestone in our quest for comprehensive financial inclusion and agricultural empowerment.”
It is pertinent to know that in Africa, farmers and people living in rural communities are still not allowed access to the banking system, which keeps them from being able to get loans to expand their businesses, BrandSpur national news reports.
A National Bureau of Statistics (NBS) study from 2022 states that just 7% of farming communities obtained bank microcredits. Only 11% of agricultural areas have access to bank loans, according to the survey, with many other communities in the nation reporting significantly lower percentages.
Furthermore, the survey discovered that credit facilities obtained through cooperative groups were more frequently utilized than bank loans, with approximately 24% of the towns surveyed indicating that credit was available via cooperatives.
Mobile devices and other Fin-Tech platforms that enable contactless payments have changed the game in terms of getting more people—even those living in distant areas—into the financial system. This would facilitate the agriculture sector’s long-standing difficulty in obtaining loan facilities.
Despite accounting for more than 20% of GDP, the agriculture sector received only N2.26 trillion, or 5.07%, of the N44.54 trillion in loans that banks extended to the private sector in 2023. Furthermore, according to the Central Bank of Nigeria’s (CBN) year-end report, among the top ten sectors of the Nigerian economy, commercial bank loans to agriculture were the lowest.
Although President Bola Tinubu’s administration has halted the Central Bank of Nigeria’s (CBN) execution of development financing, it has pledged to reform the banks of industry, agriculture, and Nigeria Incentive-Based Risk Sharing for Agricultural System (NISRAL) to guarantee that these institutions fill the void left by the Central Bank.
