The United Bank for Africa is planning a N50bn loan facility for farmers across the federation, a top official of the bank has said.

The facility, which the bank aims to disburse to farmers in 2008, is a strategy to boost agriculture production.

The official, Mr. Segun Alebiosu, of the agriculture desk of the bank, gave the insight in an interview with our correspondent during the Nucleus Estate Initiative retreat that ended on Friday in Abuja.
“We see the NEI as an avenue that will spur lending to farmers in the years ahead,” he said.

According to him, the bank has earmarked N30bn for disbursement to the agricultural sector in 2007.
“Out of this, only N20bn has been disbursed to farmers, representing more than 60 per cent,” he said.
Meanwhile, another sector operator has decried the high cost of raising funds in the agric business.

According to a director with the AG Leventis Memorial Centre for Learning, University of Abeokuta, Dr. Lateef Sanni, Agric business in Nigeria faces high cost on funds.
“The high lending rate encourages service business, such as trading and imports, rather than productive ventures in the agric business sector,” Sanni said.

He said the government’s policy that agricultural loan should be disbursed at single digit interest rate had not worked due to banks’ restricted conditions on how to access loans. But Alebiosu said UBA was offering loans to farmers at single digit interest rate.