Zenith Bank Targets Loan Increase To Farmers To Boost Diversification As Oil Economy Declines.
Amid the Covid19 pandemic and the attendant downturn in the global economy, fear of subsequent decline in agricultural activities and products in Nigeria has propelled swift interventions by various interest groups.
In reaction, Zenith Bank Plc is prioritizing loans to the agricultural industry and other raw-material suppliers in the country.
“Companies that will be leaders in the next five years are those who will be sourcing their raw materials locally,” Chief Executive Officer Zenith Bank, Ebenezer Onyeagwu, told Bloomberg.
He added: “If you can get your raw materials here, you’re in business and it’s cheaper — your holding cost is cheaper, your freight cost is reduced.”
Nigeria’s no. 1 bank according to Global Finance Awards 2020, is aiming to meet increased demand from businesses needing to source raw materials locally after plunging oil prices and lockdown measures to curb the spread of the coronavirus dried up foreign-currency inflows.
It comes amid intensified efforts from authorities to encourage investment in agriculture and processing plants to help diversify the economy away from oil.
Many of Zenith’s customers want to invest in crop production or the processing industry, so they produce products they can sell to breweries, food and pharmaceutical companies, the CEO said.
The central bank offers loans to farmers through commercial banks at preferential rates to stimulate the development of the industry and has also banned imports on dozens of goods from soap and cement to milk and rice.
Zenith Bank is encouraging customers to access funds from the central bank, which it matches with dedicated officials to ensure the projects they undertake are well executed, Onyeagwu said.
As companies strive to meet the food requirements of the nation’s 200 million people, Nigeria could potentially become a non-oil exporter over the medium- to long-term, he said.